China Steel Corp (
Key to its plans is the construction of the nation's second integrated steel mill through its 70 percent-owned Dragon Steel Corp (中龍), Chen Yuan-cheng (陳源成) told Dow Jones Newswires.
"Taiwan doesn't have much natural resources. We have to import iron ore, coal, everything," Chen said in a recent interview. "The reason China Steel has performed strongly is because we have extensive experience in steel mill management, we have good equipment, and we are efficient."
"But China will catch up on this. So we have to upgrade," Chen said.
The Dragon Steel plant, which is expected to be completed in 2009, will produce high-quality steel products, rather than importing them, so China Steel expects to save costs and better maintain consistent quality, Chen said.
Over the past two or three years, China's steel industry has grown rapidly, changing from a net steel importer to net exporter and now pumping out about one-third of global output.
To tackle the vast Chinese market, China Steel's strategy is to partner with other Taiwanese companies operating in China through either acquisitions or investments, Chen said.
Much of Taiwan's steel-consuming industry -- which supplied the world with products as varied as bicycles, fans, and umbrellas in the 1980s and 1990s -- has moved offshore for lower costs, mostly to China.
While their departure led to lower steel demand domestically, they also became a bridge into a new market for China Steel, Chen said.
"Taiwanese businesses in China are a great asset for us," Chen said. "They can mean an extension of our business world."
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