Major Japanese steel-maker JFE Steel Corp. has acquired a 50 percent stake in a unit of China's top steel-maker, China BaoWu Steel Group Corp., and will start making high-grade specialty bar steel for Japanese automakers in China.
JFE will inject 690 million yuan (¥10.64 billion; $98 million) into Baosteel Special Steel Shaoguan Co., a specialty bar steel-maker under BaoWu, to form a joint venture. The group's subsidiary, Guangdong Shaoguan Iron and Steel Songshan Co., will hold the remaining half, according to a company statement released Tuesday.
The joint venture, based in Shaoguan in the southern province of Guangdong, has an annual output capacity of 1.1 million tons of specialty bar steel.
JFE aims to help Japanese automakers with local procurement of high-grade specialty bar steel in the world's largest automotive market. Until now it has relied on Japanese exports.
The Tokyo-based company will also seek opportunities to supply the product to Chinese and other foreign automakers as well, a spokesman for JFE said Tuesday.
JFE and BaoWu have been collaborating on various joint ventures.