China Steel Corp (CSC, 中鋼) said yesterday that a new furnace at its subsidiary, Dragon Steel Corp (中龍鋼鐵), would become operational today, pushing CSC’s annual steel production up to 20 million tonnes a year.
“The new furnace is the final step in our five-year plan initiated in 2008, which aimed to invest NT$200 billion (US$6.7 billion) and increase our annual capacity to 20 million tonnes,” China Steel vice president Steve Lee (李慶超) said by telephone yesterday.
According to the World Steel Association, 14 steel companies around the world in 2011 had the capacity to produce 20 million tonnes of crude steel a year.
The furnace that will begin operating today can produce 2.5 million tonnes of hot-rolled sheets and coils, and these products would serve as raw materials for a plant in Vietnam, which is funded by CSC and Japan-based Nippon Steel & Sumitomo Metal, Lee said.
CSC has invested US$1.15 billion in the Vietnam plant, Lee said.
It is set to become operational in June and will target customers in the auto industry, as well as home appliance providers in South East Asia, Lee added.
The furnace will be Dragon Steel’s second, and the sixth furnace under CSC’s control.
Dragon Steel started operation of its first furnace in February 2010, while CSC began operation of its four furnaces between 1971 and 1997.
Steel companies usually have at least two furnaces to maintain production levels as every furnace requires six months of maintenance after operating for 10 years, Lee said.