CSC Kicks Off An Upgrading Project

Taipei, Jan. 10, 2006 (CENS)--To meet the rapid growth of steel production in mainland China and the possible erection of a large-sized steel plant by Formosa Plastics Corp. (FPC), China Steel Corp. (CSC) has kicked off a massive upgrading project.

CSC is preparing to spend at least NT$30 billion (US$937.5 million at US$1:NT$32) to install several new production lines for cold-rolled and galvanized steel in addition to strengthening overseas distribution channels, with the new lines to focus on high-value-added steel products.

Although the mainland China authority has come up with an iron and steel industry development policy to tackle overproduction problem, CSC believed the problem would continue as the mainland won' t take harsh action to shut down less-competitive plants which are the lifelines of a huge population.

CSC said Taiwan' s steel manufacturers should develop high-value-added product lines as the Asian steel market would be affected by the mainland' s overproduction in the years to come.

Because of the mainland' s overproduction, the steel price in the international marketplace has been on the wane over the past several months. Furthermore, Taiwan government is helping FPC set up an integrated steel plant in a bid to establish a two-pillar production mode in the domestic steel industry.

CSC is actively mapping out an upgrading project to adjust product structure, step up the production of high-value-added products, and enhance distribution deployment worldwide.

In its efforts to boost production value, CSC plans to add a production line of cold-rolled steel with annual output of 1.08 million metric tons, and another one for the production of hot-dip galvanized steel coils with yearly production capacity of 500, 000 metric tons.

CSC noted cold-rolled steel is one of its hottest-selling product lines with the most popular CQ2-class steel used in stamping procedure. It is expected that CSC would continue to develop new cold-rolled steel items to meet the increase demand by downstream manufacturers of stamped parts.

While making production expansion, CSC will target the automotive industry for the sales of high-value-added cold-rolled steel. Recently CSC has sent some cold-rolled steel for certification by foreign automobile manufacturers. If CSC can get approval from foreign automobile manufacturers, it would step by step increase the production of high-value-added cold-rolled steel for high-class automobiles and relevant parts.

An executive of the government-funded Metal Industry Research and Development Centre said CSC has already mapped out a concrete plan to increase production of high-value-added steel plates for automobiles. At present, CSC-made steel plates have won great recognition from Yulon Motor Co. and China Motor Co.