With China now the largest iron and steel producer in the world, and with domestic competition fiercer than ever, more Chinese companies in this field are seeking opportunities overseas.
As the second largest iron & steel manufacturer in the world, Hebei Iron & Steel Group is looking to expand its operations abroad. After setting up trading companies, and buying mines for iron ore, it is planning to build a five million-ton Iron & Steel plant in South Africa.
“We produce about 20 million tons of ore in South Africa every year. Building a plant there could save us huge shipping costs. Also the need for steel products is high in South Africa,” Liu Jian, general manager of Hebei Iron & Steel Group, said.
Hebei Province is China’s Iron & Steel production base. However, in recent years, an over-developed production capacity has led to a plunge in steel product prices. Even worse, the processes of production are also blamed for polluting the air. As a result, China has made a clear goal to cut iron & steel production capacity by 60 million tons by the end of 2017.
With China promoting the Belt and Road Initiatives, the country’s iron and steel industry is look for opportunties overseas. And many domestic corporations are looking to become trans-national groups.
Based on China’s 21st century Maritime Silk road, the vision for basic infrastructure development in South-east Asia and Africa is considered a real opportunity by Iron & Steel companies.
“China is a front-runner in the global Iron & Steel Industry, for both equipment and technology. The Belt and Road Initiative could help promote our high value-added products and advance technologies and, in the meantime, help other countries to improve their industrial levels,” Liu said.
Zhang did emphasize than their plant abroad is using advanced technology and there are strict regulations on pollution. Such revelations will get the support of the Ministry of Foreign Affairs, which stresses that successful cooperation is the basic principle.