Think of “green,” and power-hungry, heavily polluting steel mills are hardly the first thing that comes to mind. But privately owned steel maker China Oriental Group Co. Ltd. (0581.HK) wants to change that perception with its new move into environmentally friendly products.
Last Wednesday, the company, which makes steel beams and strips widely used in construction and construction machinery, announced its formation of two joint ventures with ArcelorMittal (MT.US), the world’s second-largest steelmaker. The ventures will produce items that can be used in manufacturing goods from electric vehicles (EVs) to green power facilities.
China Oriental called the foray a “high-tech, green, and digital” endeavor to expand into higher-end products that align with China’s carbon neutrality efforts and the thriving EV market, according to the announcement.
One of the joint ventures will produce materials that the other will use to make NEMM products, a soft magnetic material that can be used in manufacturing sectors ranging from automobiles to power generation, for the domestic Chinese market. The two ventures will require $2.66 billion in investment, including $660 million for the upstream venture and $2 billion for the downstream one.
China Oriental added that both joint ventures have received support from local governments in Tangshan, Hebei province, and Changzhou, Jiangsu province, in terms of land acquisition, access to energy infrastructure, and financial incentives.