Beijing Shougang Group, China's fourth largest steel maker, will move all its pollutive plants to neighboring province by 2010, Tuesday's Beijing Times reported.

Xie Zhenhua, head of the State Environmental Protection Administration of China, revealed that the State Council, or Chinese cabinet, has approved the steel maker's relocation plan, according to the paper.

Founded in 1919, Shougang Group (also Capital Iron and Steel Group) spearheaded numerous technological breakthroughs in China's iron and steel industry and remained the country's industrial pride for decades.

According to a Shougang plan submitted to the State Council, the group will build a new base in neighboring Hebei Province, with an expected annual production capacity of eight million tons

The new base covering about 20 square kilometers will be located in Caofeidian, an island 80 km south of Tangshan, a scenic coastal city in Hebei Province.

The current Shougang base in Beijing's western suburbs, which has long been blamed as the capital's worst polluter with chimneys belching out thick clouds of smoke, still will be Shougang's headquarters.

The group sources said Shougang is planning to develop non-steel-making sectors such as real estate and mechanical and electrical industries at the vacated places.

According to Shougang, the company earned a record post-tax income of 1.25 billion yuan (about US$150 million) in 2004, up 21.6 percent year-on-year. Its sales income totaled 61.9 billion yuan (US$7.46 billion) last year, a rise of 39.9 percent from that of 2003.

The State Council also agreed that Shougang Group can enjoy a special tax policy, which allows the company to pay all income taxin Beijing while pay value added tax in separate local places, said the paper.

(Xinhua News Agency February 10, 2005)