October 12, 2008

Shaogang’s plans for Zhanjiang Steel Project

Mr Yu Ziquan, the board chairman and general manager of Shaoshan Iron & Steel Group indicated recently that Shaogang would actively collect capital for structure optimization and industrial upgrade, in order to fulfill the aim of producing 5.1million tons of steel and earning CNY24.7billion distribution income and CNY600million profit in this year.

Total profit in Shaogang in Q1 in 2008 was CNY 260million. Shaogang will continue to strengthen structure optimization, industrial upgrade, outdated equipment elimination in the coming few years according to the program for “11th five-year” plan.

It is forecasted that steel demand in province Guangdong could be over 50million tons in 2010. The supply is still not able to satisfy the demand when Zhanjiang Steel Project commissions, the capacity in the first phase is 10 million tonnes of steel per year. As a result, Shaogang is still an important supplier in the market in Guangdong.

Meanwhile, Shaogang plans to exploit abundant raw materials resources such as iron ore in the north and east of Guangdong and other regions in the province as well. There are no new projects in Shaogang in recent years and the capacity keeps at 5 million tonnes per year.