Strategic Alliance Formed between Baosteel and Sinkiang Bayi Steel (81Steel)(29123)

On 11th March, Baosteel Group Corporation Ltd., and Sinkiang Bayi Irion & Steel Group Co., Ltd., signed an official Strategic Alliance Framework Agreement in Beijing. Based on the principle of "sincere friendship, mutual benefits and cooperation for win-win situation", both parties will seek predominance in competition jointly for common development to contribute more to the healthy development of Chinese iron & steel industry through constantly furthering the breadth and depth of the strategic cooperation. Mr. Wang Lequan, member of the Political Bureau of the Central Committee of the CPC, secretary of Sinkiang Uigur Autonomous Region's committee of CPC, and Mr. Chen Liangyu, member of the Political Bureau of the Central Committee of the CPC and secretary of Shanghai Municipal Committee of the CPC were present at the signing ceremony and delivered speeches. Also present at the ceremony are Mr. Li Rongrong, director of Commission of Land and Resources of the State Council, Mr. Zhang Guobao, director of State Development and Reform Commission, Mr. Ismail Tiliwaldi, deputy secretary of the Committee of the CPC and chairman of the People's Government of Sinkiang Uigur Autonomous Region, Mr. Han Zheng, Deputy secretary of Shanghai Municipal Committee of the CPC and the mayor, Mr. Shao Ning, deputy director of Commission of Land and Resources, Mr. Song Airong, deputy chairman of the people's Government of Sinkiang Uigur Autonomous Region, Mr. Wu Xichun, adviser of China Iron & Steel Association, Mr. Liu Zhenjiang, secretary of the Committee of the CPC of China Iron & Steel Association. The enterprise leaders present at the ceremony are Ms. Xie Qihua, Mr. Liu Guosheng, Mr. Xu Lejiang, Mr. Ai Baojun, Mr. Zhao Kun, Mr. Ma Guoqiang, Mr. Zhao Zhouli, etc from Baosteel and Mr. Zhao Xia, Mr. Chen Zhongkuan, Mr. Apizi Niyazi, Mr. Wang Yimin, etc from 81Steel. Mr. Xu Lejiang, general manager of Baosteel and Mr. Chen Zhongkuan, general manager of 81Steel signed the Agreement representing the two parties respectively. Baosteel boasts of the highest management level and degree of modernization among the nation's iron & steel enterprises, with top grade steel as leading products. In 2005, Baosteel turned out 22,730,000 tons of steel product, which ranks no. 6 of the world. 81Steel's current steel production capacity is 3,000,000 tons, with building material as key product, while the 3,000,000 ton plate project is under construction. As the biggest iron & steel enterprise of Sinkiang, 81Steel has a natural advantage of rich resources in coal mine and iron ore, the unique advantage of location and the advantage of foreign trade with neighboring Central Asian countries, all of which lays a ground for a promising development potential. Through entering into the Strategic Alliance Framework Agreement, 81Steel will introduce from Baosteel their advanced cultural ideas and mature management experiences to constantly upgrade the management level to meet the strategic target of expansion and strengthening. With 81Steel's advantage in location, Baosteel might fully develop their advantages in technology, qualified personnel, management and marketing to expand its market share in Sinkiang as to the whole north west. At the same time, benefited from 81Steel's strategic location of the Asia-Europe continental bridge and the bridge tower of opening to the west, Baosteel might exploit the rich resources of the Central Asian countries and the iron & steel consumption market thereof to expand the development field and to seek for more development opportunities to pace up toward the first rate iron & steel enterprise of the world. Ms. Xie Qihua, president of Baosteel and Mr. Zhao Xia, president and secretary of CPC committee of 81Steel expressed in the ceremony their wishes to actively advance the strategic alliance between Baosteel and 81Steel to further strengthen both parties' competitiveness and abilities to withstand market risks to commonly exploit the resources of the west, to seek together strategic cooperation in major projects of developing the western region and to jointly pay close attention to development opportunities in Central Asian market and that a significant synergic effect will surly result from their cooperation. Mr. Zhang Guobao and Mr. Shao Ning stated in their speeches that the strategic alliance between Baosteel and 81Steel is beneficial to the implementation of the state's Development Policies of Iron & Steel Industry and with further development of the western regions, it will bring about an active and far-reaching effect on upgrading both parties' overall competitiveness and realization of a harmonic win-win situation. Mr. Chen Liangyu expressed his congratulations on signing of the agreement and the following cooperation on behalf of Shanghai Municipal Committee of the CPC and Shanghai Municipal government. He said that Shanghai is proud of Baosteel and Shanghai will render full support to signature and implementation of the agreement to further develop Shanghai's cooperation with Sinkiang in all areas. He hopes that Baosteel achieve even more glorious victory with this event as a new starting point. Mr. Wang Lequan pointed out in his speech that to benefit each other through the east-west cooperation, the alliance is a right and farsighted strategic measure, and is important for the development of our iron & steel enterprises under the trend toward economic globalization. He wished the cooperation between Baosteel and 81Steel a great success.

Strategic Alliance Formed between Baosteel and Sinkiang Bayi Steel (81Steel)

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