Chinese steel producer Jianlong Group is planning to increase its crude steel capacity from 23 million mt to 50 million mt by means of mergers and acquisitions over the next five years, company chairman Zhang Zhixiang stated at the 9th China International Steel Congress held in Beijing.
Earlier this month, Jianlong Group resumed production at the steel production facilities of the bankrupt Shanxi Province-based steelmaker Haixin Iron and Steel Group, which it had purchased in 2015. While production has only been partially resumed for now, Jialong Group aims to increase the annual crude steel output of the facilities in question from the current 3 million mt to 6 million mt.
According to Zhang, low concentration is the biggest problem for the Chinese iron and steel industry, and only by mergers and acquisitions can this problem be solved. Jianlong Group is planning to set up a merger and acquisition fund. Owners of mills experiencing problems in management or production will be able to convert their assets into shares in this fund, while Jianlong will participate in the daily management of such mills. Meanwhile, Mr. Zhang also stated that the main targets of Jianlong Group’s mergers and acquisitions will be private sector enterprises because they are easier to operate than state-owned companies.