An official with Tianjin Development and Reform Commission disclosed to China Business News that "The program about consolidation of four major Tianjin based steel mills into one group has got approved by the municipal government and started up.”
The concept of their M&A was first raised in the Plan of Steel Industrial Adjustment and Promotion published by the State Council early in March 2009.
A top management told the paper that the four companies have agreed on the new company's name as Tianjin Bohai Iron & Steel Group. The new group's capacity will reach over 20 million tonnes.
The four mills are Tianjin Pipe Corporation, Tianjin Tiantie Metallurgical Group, Tianjin Iron & Steel Group Co Ltd and Tianjin Metallurgical Group.
Tianjin Pipe, now China's largest production base for petroleum casing pipe with a capacity of about 3 million tonnes, enjoys the highest returns.
Tiantie specializes in HRC, medium plate and rebar with a capacity of 5 million tonnes.
Tianjin Metallurgical Group has capacity of 5 million tonnes of HR and CR
Tianjin Iron & Steel is capable of yielding 6.5 million tonnes a year of medium plate, rebar and wire rod.
A top source with Tianjin Pipe said that "We have to purchase tube blank every year from Tianjin Iron & Steel as we cannot feed the appetite of ourselves with what we produce. And apart from medium and high-end product, the company is going to extending to downstream sector."
He added that "It is not economical to produce low end tube with electric furnace. But the converters of the other mills could be capitalized after consolidation."
