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Beijing-based Shougang (Capital Iron and Steel) Corporation - the country's third largest steel producer - will slash output by nearly one quarter this year.
It will also begin construction of a modern iron and steel complex with similar production capacity in neighbouring Hebei Province.
Shougang Chairman Zhu Jimin announced in Beijing yesterday that his corporation will cut its steel production by 2 million tons this year - close to one quarter of its output of 8.17 million tons in 2002.
The move should help the Chinese capital improve its air quality and environment and prepare for the Beijing 2008 Olympic Games.
Admitting the closure of many production facilities in its Beijing complex has led to unprecedented pressure and difficulties for the corporation, Zhu said Shougang will turn the challenge into an unprecedented opportunity. It will readjust its production structure and explore new development potential.
The corporation will start construction of the Shougang Qian'an Iron and Steel Co Ltd in Hebei Province this year. With a designed annual steel output of 2 million tons, the Qian'an iron and steel plant will complete its construction and go into operation in July 2004.
Qian'an has been the major iron ore production and supply base for Shougang Corporation for many years. It has excellent facilities and an abundant supply of skilled personnel for construction of the new steel plant.
The plant will spur further development of the steel giant in the future, he said.
To dispel worries that the Qian'an plant might be a replica of the demolished facilities in Beijing, Zhu stressed Shougang will not move part of its production facilities in Beijing to Qian'an as an exact copy.
Shougang will build the Qian'an steel plant into a model iron and steel production base in the country.
The new plant will be equipped with the best environmental protection technology and facilities. It will also adopt the modern corporate system and management techniques, he noted.
The modern Qian'an plant will put emphasis on the production of new, high-tech, and high value-added steel products to meet national demand.
At the same time, Shougang will grasp the opportunity to readjust its production structure and renovate its existing production facilities in Beijing. This will enable the capital plant to further cut production costs, reduce industrial pollution and develop more high-tech and high value-added products.
An important economic pillar and tax contributor in Beijing, Shougang is expected to realize total sales revenue of 37 billion yuan (US$4.47 billion) in 2002 - an increase of 1.1 billion yuan (US$133 million) on the previous year.
Of the total sales revenue, 51.35 percent came from its non-steel and international businesses while the remaining part was contributed by its iron and steel products.
(China Daily January 24, 2003)
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