CITIC Pacific to expand steel capacity

CITIC Pacific, a diversified entity focusing on three main businesses such as special steel, iron ore and real estate, returned to gains last year by posting an attributable profit of HK$5.95 billion. The company runs three special steel plants Shijiazhuang Steel, Jiangyin Xingcheng Special and Hubei Daye Special that reaped a combined profit of HK$1.42 billion last year, down 12 percent, due to weak demand from home and abroad; and produced 6.4 million tons of steel including 2.99 million tons in Xingcheng and 1.7 million tons in Daye. Rumors abound that CITIC is in talk with Hebei Iron and Steel to sell a 65 percent stake in Shijiazhuang Steel for just 1.9 billion yuan as part of a relocation program out of the city proper for urban planning and environmental protection reasons. In the next one year or two, CITIC will pour 19 billion yuan in Daye and Xingcheng to increase their annual output to nine million tons.