South Korea’s largest steelmaker Posco announced at the end of last week it had agreed to establish a new joint venture in China with local steelmaker HBIS Group, according to reports in South Korea.

The two partners have agreed to jointly invest US$600m in a new plant in Laoting County, Heibei Province, designated to produce up to 900,000 tons of galvanised sheet steel per year to supply the local car industry.

The deal was formally signed online last week by Posco chairman Choi Jeong-woo and HBIS Group general manager Wang Lanyu.

Each partner will have a 50% stake in the new joint venture.

Choi said the deal with HBIS Group, which is estimated to be China’s second-largest steelmaker, would help his company “strengthen its position as a leading supplier of automotive steel sheet in China”.

In its last posted financial statement, Posco said it generated consolidated net revenue of KRW64.4trn (US$57bn) in 2019 which local analysts said makes it the fifth-largest steelmaker worldwide.