Steelmakers HBIS, POSCO to invest $600 mln in China auto plates venture

The logo of POSCO is seen at the company's headquarters in Seoul, South Korea, July 20, 2016. Picture taken on July 20, 2016. REUTERS/Kim Hong-Ji/File Photo

SEOUL, June 25 (Reuters) - Steelmakers HBIS Group of China and South Korea's POSCO (005490.KS) have agreed to invest $600 million to set up a joint venture for the production and sale of automotive steel plates in China, POSCO said on Friday.

With this, POSCO seeks to establish a stable supply chain for automotive steel plates in China, the world's No. 1 auto-producing nation, the Korean steelmaker said.

The steelmakers will each invest $300 million and take a 50% stake in the joint venture, which plans to start construction of a steel plate plant in Tangshan - the heart of China's steel industry - in January next year, POSCO said. The 900,000-ton capacity plant is expected to be completed by the end of 2023.

The joint venture will also incorporate the existing Guangdong CGL - a 450,000-ton capacity automotive steel plate maker currently operated by POSCO - as its subsidiary, bringing the venture's total production capacity to 1.35 million tonnes, with the two partners planning to supply materials equally.

Register now for FREE unlimited access to
Reporting by Joyce Lee; Editing by Pravin Char

Our Standards: The Thomson Reuters Trust Principles.