CITIC’s latest restructuring aims to add value to its special steel assets
Jan 04, 2019 (China Knowledge) - A merger between CITIC’s steel units Daye Special Steel and Xingcheng Special Steel will allow the CITIC to better consolidate its steel business and unlock new synergies while also improve its disclosure and transparency.
The merger between the two companies is the largest restructuring in three years for CITIC and will help Daye and XingCheng to increase the overall value of their steel assets, widen their financing options and increase their production capacity of high-grade steel products.
Daye which is based in China’s Hubei province, makes range of alloy-steel products used in railways, automobiles, mining, oil and gas as well as many other sectors. Xingcheng which is based in Jiangsu province produces steel used for the manufacturing of gears, bearings and other structural alloys used in ship and ocean engineering.
China’s special steel industry has a relatively positive outlook compared to its commodity steel industry as the country seeks to become more self-sufficient for high-quality steel products which command higher prices.
As China continues with its industrial expansion, the country requires more special steel to build infrastructure such as oil and gas pipelines and bridges. China aims to consume and produce more of such high-quality products and reduce its reliance on imports.
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