Japan’s JFE Steel grabs 50% stake in Chinese rival
JFE Steel Corp., a major steel producer in Japan, purchased a 50% stake in China’s leading steel manufacturer, BaoWu Steel Corp. and will begin producing high-quality bar steel for Japanese automakers in China.
JFE Steel will invest 690 million yuan ($10.64 billion) into the joint venture of Baosteel Special Steel Shaoguan Co., a BaoWu speciality bar-maker. According to a company statement published Tuesday, the group’s affiliate, Guangdong Shaoguan Iron and Steel Songshan Co.
The Joint Undertaking, located in Shaoguan, southern Guangdong province, has an annual production capacity of 1.1 million tonnes.
JFE Steel is committed to assisting Japanese manufacturers with the local procurement of high-quality bar steel on the largest automotive market in the world. It depended on Japanese exports until now.
A JFE Steel spokesman on Tuesday said, “The company based in Tokyo will also pursue opportunities to supply the commodity to Chinese and other international auto manufacturers.
JFE Steel and BaoWu worked together on many joint ventures.