Chinese steelmakers Baosteel and Chongquing Iron and Steel under the Baowu group are looking to strengthen their market position through acquisitions. Baosteel looks to acquire controlling rights in three carbon fiber producing companies while Chongquing is set to purchase a 72pc stake in Xinggang Changlong. These moves are a part of the company strategy to build a 10mn mt base in Donghai Island. The first few phases of the project have already been put into operation.
Baosteel has announced it will acquire 49.74pc equity in Zhejiang Jinggong Carbon Fiber, 51.69pc equity in Zhejiang Jingye Emerging Materials, and 48.81pc stake in Shaoxing composite material as it looks to enter the carbon fiber business. Carbon fiber is considered five-times stronger and two-times stiffer compared to steel. The light-weight material is used in many components in the manufacturing sector. The acquisition consideration is estimated at CNY500mn ($76.34mn).
Chongquing plans to purchase 60pc shares held by Chongqing Qiancheng Industry Development and 12pc held by Minsheng Shipping in Xingang Changlong. After the conclusion of these transactions, Chongquing will become the sole owner of Xingang Changlong and improve the industrial chain, optimise the allocation of resources, to create the most competitive iron and steel production base in southwest China.