OREANDA-NEWS. September 10, 2012. To further consolidate and strengthen the leading position of Baosteel in the field of high-quality carbon steel flat material and enhance the performance of the company, Baosteel Co., Ltd made a resolution on the second meeting of the fifth session of the Board of Baosteel that Zhanjiang steel base construction project is planned to be built, which is submitted to the Shareholder meeting for review, reported the press-centre of Baosteel. 

It is said that phase one of Zhanjiang steel base project is preliminarily designed with  production scale production of 8.23 million tons of iron, 8.71 million tons of crude steel, and 6.37 million tons of steel. The project static investment is about 40 billion yuan, close to the expected investment return of Baosteel Shanghai headquarters level, the internal rate of return is approximately 9%.

Guangdong is a concentrated area of automotive and appliance steel users, of which the steel demand is mainly met by transporting the north manufactured steel to the south . Nowadays, Baosteel sells a big quantity of steel to Guangdong Province and other southern China area, which owning a high automobile steel market share. Zhanjiang steel base project can reduce the cost of production, decrease logistics costs and improve customer service. The major strategic customers also expect Baosteel to build up Zhanjiang steel base project.

Building up steel base in Zhanjiang not only meets with Baosteel's development strategy and industrial layout,  but also Baosteel can transform its existing management capabilities and technical resources  into practical competitiveness to optimize product structure, expand market share and optimize human resources, innovative management mode, do the structural adjustment of production capacity of the Shanghai region, revitalize the stock assets, realize cross-regional operation, so as to further enhance the company's competitiveness which has significant strategic impact on the long-term development of the company.

After the prophased estimation and demonstration, Baosteel considers that Zhanjiang steel base has advantages in iron ore logistics costs, the finished product logistics costs, the plant logistics costs, process manufacturing costs . Although the current market situation of the steel industry is grim, but the engineering construction material prices tends to be low for the steel project is a good building opportunity.

Principal investment and construction management of Zhanjiang Base by Baosteel can realize most suitable construction proposalss in the shortest period of trial production with best run effect, and the more important guarantee than capital is the existing technical accumulation and human resources; Baosteel gives full play to the best mode of these technologies and resources management system with years of expansion development along with the way "a plant managing a plant". At the same time, in accordance with the mode of 'double manufacturing base' to the production line configuration, manufacturing, sales synergies to achieve high efficiency, is an important source of competitive advantage under the new situation.