Wuhan Iron and Steel (WISCO) has taken sole charge of the Fangchenggang steel project following the termination of a joint venture with Guangxi Liuzhou Iron and Steel.
Guangxi Iron and Steel was established in order to develop the Fanchenggang project in the eponymous coastal city. The project was given state approval back in May 2012 and is permitted to have an annual production capacity of 8.5Mt of iron, 9.2Mt of crude steel and 8.6Mt of steel products.
Originally the two companies were supposed to jointly develop the plant in the coastal city of Fangchenggang.
WISCO recorded a deficit in June and July this year and is now focused on cutting costs and reducing its losses. The company made a net profit of 522 million yuan in H1 2015, down nearly 10% from the previous year.
By withdrawing outsourcing businesses during H1 2015, WISCO has managed to cut costs by 90 million yuan.
Meanwhile, Chongqing Iron and Steel Company plans to raise 4.96 billion yuan to repay bank loans and invest in a POSCO cold-rolled sheet project and a zinc-coated steel sheet project, both of which aim to increase the proportion of automotive steel on the company’s production line.
A total investment of 6.2 billion yuan is required and annual production capacity is expected to reach 2.4Mt once the projects are up and running.