Chinese steelmakers Ansteel Group and Ben Gang officially started the process of consolidating their operations on Friday, the official news agency Xinhua announced, in a move that will make it the world’s third-biggest producer of the metal.
State-owned Ansteel is taking a 51% stake in more modest adversary Ben Gang from the provincial state asset regulator; with no cash changing hands in a government-backed restructuring that is important for a drive to consolidate production in China’s swollen steel sector.
The merged entity, which will bear the Ansteel name, will have a yearly production limit of 63 million tons of unrefined steel, Xinhua said, subsequent to joining the operations of the companies whose central command is just approximately 60 km (37 miles) separated in upper east China’s Liaoning region.
An extraordinary meeting on the consolidation was held on Friday morning in the city of Anshan, it added.
The additional production will see Ansteel overtake HBIS Group to become China’s second-largest steelmaker and make it third internationally behind China Baowu Group and ArcelorMittal.
Ansteel produced 38.19 million tons of unrefined steel in 2020, information from the World Steel Association show, while Ben Gang produced 17.36 million tons.
By 2025, Ansteel intends to produce 70 million tons of rough steel each year, just as in excess of 50 million tons of steelmaking crude material iron ore and generating 300 billion yuan ($46 billion) in yearly income, Xinhua said.
A mix of Ansteel and Ben Gang has been examined for over 10 years. The consolidation appeared to have been jettisoned in 2019 however a “vital rebuilding” of the companies was declared in April this year.
