Merger of steelmakers Ansteel and Ben Gang to create world's third largest steel manufacturer

The merger of Ansteel Group Corp (Ansteel), the Liaoning province-based centrally administered state-owned enterprise, and Ben Gang Group Corp (Ben Gang), another Liaoning-based steelmaker, will create the world’s third-largest steel manufacturer by production volume. The provincial State-owned Assets Supervision and Administration Commission of Liaoning province transferred its 51% shareholding in Ben Gang – a locally administered SOE – to Ansteel without any conditions. Ben Gang has become the latter’s subsidiary. After the reorganization, the annual crude steel production capacity of Ansteel will reach 63 million metric tons, and its operating income will reach CNY300 billion, ranking second in China and third in the world, a statement released by the State-owned Assets Supervision and Administration Commission (SASAC) and the Liaoning provincial government said.

Weng Jieming, Vice Chairman of SASAC, said the restructuring is conducive to deepening supply-side structural reform, promoting the optimization and structural adjustment of China’s steel industry, and upholding the high-quality and sustainable growth of the sector. “Giving full play to the rich mineral resources of these two SOEs in both the home and overseas markets, the move will reinforce China’s ability to control strategic resources, as well as better ensuring the security of the steel industry and supply chains,” he said.

With 63,000 employees, CNY145 billion of assets and annual sales of more than CNY100 billion, the Benxi, Liaoning province-based Ben Gang’s annual crude steel production capacity is 20 million tons. It has been one of the top 10 iron and steel manufacturers in China and ranks 17th in the world, the company said. Ansteel has a production capability of 39 million tons of raw steel, and offers 3,000 steel grades and more than 60,000 specifications of high value-added steel, vanadium and titanium products, on an annual basis. They are widely used in dozens of industries such as railways, building, automobile, machinery, shipbuilding, petroleum and petrochemical, aeronautics, and astronautics. Ansteel saw its sales revenue and profit reach CNY150 billion and CNY20.2 billion, respectively, in the first half of 2021.

Zhou Lisha, who works with the research institute of SASAC, said the government has been encouraging a realignment of the country’s crowded steel market, aiming to better prevent a potential glut and cut carbon emissions in heavy industries, as well as produce more high value-added metal products. “This is also a part of the central authorities’ newly launched program to better coordinate between local SOEs in the country’s Northeast and central SOEs to ramp up the revitalization of Northeast China,” she said. Under the government program, 111 local SOEs in Heilongjiang, Jilin and Liaoning provinces, and the Inner Mongolia autonomous region, will work closely with 100 subsidiaries of 53 central SOEs. The government will establish new central SOEs in certain industries to support innovation-based growth, the China Daily reports.