© Reuters.
© Reuters.

BEIJING (Reuters) – China’s biggest private steel producer, Jiangsu Shagang Group, said on Monday it will invest 14.8 billion yuan ($2.25 billion) in buying up and modernising steel mills in central Henan province in a project to create a high-end manufacturing base.

Led by Anyang Yongxing Special Steel Co Ltd, a unit of Shagang based in Henan, the project targets annual iron capacity at 4.94 million tonnes and steel capacity at 5.5 million tonnes when complete, the company said, confirming a local media report. The company didn’t disclose its planned completion date.

The company declined to identify potential acquisition targets by name, but said private mills in the Anyang city area would be involved. Anyang Yongxing currently has iron and steel capacity at 1.85 million tonnes and 2.22 million tonnes, respectively.

Beijing has been promoting consolidation in its more than one-billion-tonne steel sector in an effort to enhance major producers’ competitiveness and knock out outdated production capacity. China Baowu Steel Group has completed multiple acquisitions and takeovers across the country this year.

Henan produced 32.99 million tonnes of crude steel in 2019, data from the National Bureau of Statistics showed.

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