By APD writer Kin Ratha

PHNOM PENH, May 28 (APD) - Baowu Group, China’s leading steelmaker, will relocate their blast furnaces from China to Cambodia within this year for its first business operation abroad.

According to Reuter quoted the company’s a senior manager who asked not to be named reported on Tuesday that Baowu Group is studying plans to relocate blast furnaces from remote Xinjiang to Cambodia in a bold example of China’s heavy industry shifting excess capacity overseas.

It said that the move, which would mark Baowu’s first overseas production, shows the lengths Chinese steelmakers are prepared to go to maintain output levels despite Beijing’s drive to cut industrial slack in the mainland.

Baowu is looking at the feasibility of shipping two blast furnaces, with a combined capacity of 3.1 million tonnes, along with two converters to turn iron into steel, to Cambodia in late 2019, a senior Baowu manager involved with the plan told Reuters.

China has shut more than 150 million tonnes of steel capacity in the past three years as part of a campaign to modernize its economy, but still accounts for half of the global output, with the capacity of 980 million tonnes a year, Reuter reported.

The equipment to be moved would come from Xinjiang Bayi Nanjiang Steel Baicheng Co Ltd, a Baowu subsidiary based in Aksu in far northwest China. The plant was shut in 2017 and sits some 4,000 km (2,480 miles) from the Cambodian capital of Phnom Penh.

“This equipment may be seen as outdated in China, but it is still quite advanced in Cambodia,” the manager said.

(ASIA PACIFIC DAILY)