Shanghai-based China Zhongchong Group (China Zhongchong) plans to invest RMB 2 billion ($0.31 billion) in acquiring shares in Shandong Province-based Chinese steelmaker Rizhao Steel Holding Group Co. (Rizhao Steel), as announced by Rizhao Steel’s parent company Chinese steelmaker Shandong Iron and Steel Group Co. (Shandong Steel). Accordingly, China Zhongchong will also participate in the management of Rizhao Steel.
Rizhao Steel was founded in February 2009 with a registered capital of RMB 1.48 billion, as a wholly-owned subsidiary of Shandong Steel. It has since received a total of RMB 8.7 billion in external capital investment. In June 2013, construction started in Rizhao Steel’s production base for value-added products, with production due to commence in 2017. The production base has a planned annual output of 8.1 million mt of pig iron, 8.50 million mt of crude steel and 7.9 million mt of finished steel.
Meanwhile, China Zhongchong Group was established in June 2011 with a registered capital of RMB 500 million. Its main business includes fields such as supply chain services, real estate development and management, cross-border infrastructure investment, financial investment and derivatives investment. Its supply chain services are mostly focused on Chinese steelmakers, while it already implements strategic cooperation with Guangxi Zhuang Autonomous Region-based steelmaker Liuzhou Iron and Steel Co. (Liuzhou Steel) and Anhui Province-based steel producer Masteel .