China's second-largest steel producer, Anshan Iron & Steel Group Corporation, recently signed a letter of intent with the Shenyang municipal government to establish a high-quality products processing and distribution base in the capital of northeast China's Liaoning Province.

The new 1-square-kilometre plant is designed to provide high-end products for the local automobile, machine tool and aircraft industries, and serve as the distribution center for northeastern China.

Anshan Steel Group General Manager Liu Jie said the group is expected to notch up an annual sales revenue of over 40 billion yuan (US$4.8 billion) in 2004.

The group's steel output was 10 million tons in 2003, with its sales revenue reaching 31.5 billion yuan (US$3.8 billion).

The automobile sector is playing an increasingly important role in this northeastern industrial city, and the group, headquartered in the nearby "steel town" of Anshan, is seeking to profit from this.

The high-end automobile steel plate sector has assumed an increasingly important part in the group's business, said Liu.

In the first 11 months of last year, the group produced over 120,000 tons of high-quality steel plate for automobile producers both at home and abroad, including many famous international brands, such as Volkswagen, BMW and Ford.

"The past years saw a high-speed development in Shenyang, especially its automobile industry. This new plant would complete our products chain and better serve local clients," Liu added.

Shenyang is home to the Jinbei Automobile Co, one of the nation's major mini-bus producers and BMW's first plant in China.

Shenyang is a city that is hungry for steel, with many large-scale enterprises consuming one million tons of steel consumption annually. The figure is set to rise as Shenyang continues its economic recovery.

(China Daily January 5, 2005)