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SEOUL (Reuters) - Steelmakers HBIS Group of China and South Korea's POSCO have agreed to invest $600 million to set up a joint venture for the production and sale of automotive steel plates in China, POSCO said on Friday.
With this, POSCO seeks to establish a stable supply chain for automotive steel plates in China, the world's No. 1 auto-producing nation, the Korean steelmaker said.
The steelmakers will each invest $300 million and take a 50% stake in the joint venture, which plans to start construction of a steel plate plant in Tangshan - the heart of China's steel industry - in January next year, POSCO said. The 900,000-ton capacity plant is expected to be completed by the end of 2023.
The joint venture will also incorporate the existing Guangdong CGL - a 450,000-ton capacity automotive steel plate maker currently operated by POSCO - as its subsidiary, bringing the venture's total production capacity to 1.35 million tonnes, with the two partners planning to supply materials equally.
(Reporting by Joyce Lee; Editing by Pravin Char)