Baowu Steel aims to reach over 100 million tonnes of steel per year

Baowu Steel Group announced that it intends to acquire a controlling stake in Chongqing Iron and Steel Co Ltd, which will effectively push the company towards its annual production target of more than 100 million tonnes per annum. Chongqing Iron and Steel Co Ltd, a Shanghai-based company, said China Baowu will buy the shares outright and the deal is expected to be completed by the end of June this year.

Established in 1997, Chongqing Iron Steel Works has gone through a number of owners and stakeholders since its inception. In 2017, Four Rivers was created as a foundation to support the company's growth, which led to major renovations and restructuring. China Baowu, through its investment arm Hwabao Investment, has acquired a stake in Four Rivers along with the US-China Green Fund.

China Baowu is currently the largest steel producer in China and was formed from the merger of Shanghai-based Baosteel Group and Wuhan Iron and Steel Group in December 2016. Steel production capacity currently stands at over 70 million, making it the second largest steel producer in the world after ArcelorMittal in Luxembourg.

The acquisition is the latest in a series of strategic purchases made by China Baowu as part of its strategic plan to achieve more than 100 million tonnes of production capacity by 2021. China Baowu originally unveiled its plans in November 2017 as part of its development roadmap. with the aim of increasing production from 80 million tons to 100 million tons by 2021.

Last June, China Baowu announced plans to acquire Maanshan Iron and Steel Co. The acquisition significantly increased the company's steel production by approximately 19.64 million tonnes. The additional capacity has brought China Baowu closer to its target production capacity. However, the producer has not yet reached its target of 100 million tonnes.