South Korea's largest steel company POSCO has agreed in principle to set up a joint venture with Chinese steel manufacturer HBIS Group Co Ltd to develop, produce and sell high-end steel products for the automobile industry.
The new joint venture is expected to be based in Tangshan in China's northern Hebei province, near HBIS's Laoting cold rolling steel plant, and will focus on developing high-end steel products for the local automotive market,
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The two companies signed a memorandum of understanding (MoU) earlier this month following a series of discussions held in the first half of 2019, but details such as scale of the project and investment requirements have yet to be finalised.
The partnership will help provide POSCO with greater access to Chinese automakers in the world's largest vehicle market, while HBIS will benefit from the South Korean steelmaker's technological capabilities in making high-end steel required by leading global automakers.
Demand for high-end steel in China is rising rapidly, according to local analyts, as local automakers look to compete head on with global brands.
