Shaanxi to integrate three iron and steel firms

May 14, 2009 (China Knowledge) - China's northwestern Shaanxi Province will integrate three iron and steel firms to form an industry giant, to be called Shaanxi Iron and Steel Group, to improve the competitive strength of the local iron and steel industry, sources reported.

The Shaanxi government approved the merger and acquisition (M&A) plan, which will involve Hanzhong Iron & Steel Group Co (Hanzhong Steel), Lueyang Iron and Steel Co Ltd (Lueyang Steel) and Shaanxi Longmen Iron and Steel Group Co (Longmen Steel).

Moreover, the local development and reform commission is coordinating with regulators to speed up the technological innovation at Longmen Steel.

According to the technological innovation plan, the company will close inefficient production facilities and set up two blast furnaces that will each have a capacity of 1,280 cubic meters.

Currently, Longmen Steel has a yearly output of 3 million tons of steel products that include wire and rebar, which are used in the construction sector.

Hanzhong Steel's annual production capacity consists of 1 million tons of steel billet and 600,000 tons of steel strip. A steel wire facility that can produce 600,000 tons of steel wire per year will begin operation this month. Lueyang Steel can produce about 500,000 tons of steel wire per year.