Leading steel companies in W. China merge

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Last updated at: (Beijing Time) Friday, November 21, 2003

Leading steel companies in W. China merge

A grand ceremony Thursday marked the merger of Panzhihua Iron and Steel Group Company and the Great Wall Special Iron and Steel (Group) Co. Ltd.

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A grand ceremony Thursday marked the merger of Panzhihua Iron and Steel Group Company and the Great Wall Special Iron and Steel (Group) Co. Ltd.

Panzhihua Iron and Steel, based in Panzhihua City of southwest China's Sichuan Province, ranks sixth in the country and is the largest and most competitive iron and steel company in west China.

The Panzhihua company, with 30 billion yuan (about 3.62 billion US dollars) in total assets, produces 5.3 million tons of steel a year, and is also one of the world's major producers of vanadium and titanium.

Annual pre-tax profits exceed two billion yuan (about 241 million US dollars), according to Hong Jibi, chairman of the board of the group company.

Great Wall Special Iron and Steel (Group) Co. Ltd., founded in 1965, is the biggest special iron and steel maker in west China. Great Wall Special Iron and Steel Co. Ltd., a subsidiary of the company, went public in 1994.

The Great Wall Special Iron and Steel group is capable of annually producing over 400,000 tons of special steel in 350 specifications which are used in aviation, aerospace, nuclear industry, electronics and telecommunications, petrochemical industry, energy and transportation sectors.

However, the company has long suffered economic losses. By late July this year, the group company's net assets totaled 5.3 billion yuan (some 639 million US dollars), but its debts made up about 2.5 billion yuan (about 301 million US dollars), with the debt equity ratio standing at 46.32 percent.

At Thursday's function, both Panzhihua chairman Hong Jibi and Ren Yong, chairman of the board of the Great Wall Special Iron and Steel (Group) Co. Ltd., said the merger was fully out of their own will.

"Via the merger, the Great Wall conglomerate can bid farewell to loss-making and walk out of the financial difficulty in three years at most," said Ren.

Ren said the reorganized Great Wall company has a total stock of 1.62 billion yuan (about 195 million US dollars), of which, the Panzhihua group company takes 41 percent, or 671 million yuan (about 808,434 US dollars), and six other institutions take the rest.

Industry experts said that through the reorganization, both partners will improve ways to utilize resources and the move will help Panzhihua become stronger while Great Wall will hopefully step out of its economic hardship.

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