Hebei Steel Gains Control of Duferco Unit in Overseas ExpansionBloomberg News
Hebei Iron & Steel Group increased its stake in Switzerland-based Duferco SA’s trading unit to 51 percent, strengthening its overseas operations as Chinese mills boost exports amid a domestic slowdown.
The unit, Duferco International Trade Holding SA, is the world’s largest steel trading and service company, Hebei Steel said in a statement on its website. Financial information about the transaction wasn’t disclosed. China’s biggest steelmaker seeks to boost overseas sales volume to 20 percent, it said, without giving a timeframe.
State-owned Hebei Steel and its Chinese rivals are looking to shift excess production overseas as slowing domestic economic growth sapped demand from property developers. Hebei Steel’s Tangshan unit, its biggest, initially acquired 10 percent of Duferco International in March 2013.
Hebei Steel “will provide service to more than 43,000 clients through Duferco, expanding our industry chain to end customers globally,” it said in the statement.
Chinese steel exports climbed 42 percent to 73.9 million tons in the first ten months of this year from a year ago, according to customs data. Hebei Steel’s Tangshan unit said this month it will make its first shipments of auto sheet to Latin America, while its Xuancheng unit shipped hard steel wire to Japan on Nov. 7 for the first time.
Hebei Province, China’s biggest steel-producing region, is looking beyond exports to alleviate excess capacity. The provincial government wants to set up steelmaking factories in Southeast Asia, Africa and other regions. It aims to “transfer” 5 million metric tons of steelmaking capacity overseas by 2017 and 20 million tons by 2023, according to a release on its website on Nov. 17.
Duferco International, which has 3,500 employees, sells about 22 million tons of steel products and raw materials annually in over 120 countries, according to the Hebei Steel statement.
— With assistance by Helen Yuan