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China Steel to invest in cold-roll line

China Steel Corp (中鋼), Taiwan's largest steelmaker, said yesterday its board had decided to invest NT$46.44 billion (US$1.41 billion US) to build a new cold-roll steel line.

The investments will be made between April 1 this year and July 15, 2011, it said in a filing with the Taiwan Stock Exchange. The company did not specify when the project would be completed.

The new line is to carry an annual capacity of 1.5 million tonnes, China Steel said in the statement, noting that the new line will raise the contribution of its high-priced products and meet market demand.

INVESTMENT SOURCES

Some 77.28 percent of the required investments will be sourced from the company's own funds, while the remainder will come from long-term bank loans.

Separately, the board has also decided to invest NT$6.49 billion to revamp its third campaign at the No. 1 blast furnace in the period from April 1, 2007 to June 30, 2011.

The board did not specify when this project would be completed either. However, the third campaign is to increase the supply of hot metal of the No.1 blast furnace to 2.33 million tonnes from 1.97 million tonnes.

Some 22.72 percent of the required investment for the revamp will come from bank loans, while the remainder will come from its own funds, it said.

STEEL CAPACITY

The board approved investment of NT$52.9 billion to expand annual crude steel capacity by 360,000 tonnes and cold-rolled and hot-dip zinc-galvanized capacity by 1.5 million tonnes by 2011, the statement said. Cold-rolled steel and zinc-galvanized sheets are used in cars and home appliances

The Kaohsiung-based company said its full-year profit fell 23 percent to NT$39.16 billion.

The company plans to pay a cash dividend of NT$2.78 per share and a stock dividend of 3 percent, the steelmaker said.

That compares with a cash dividend of NT$3.75 and a stock dividend of 3.5 percent for 2005.
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