South Korean steelmaker Posco Group has sold its majority stake in its Chinese steel joint venture, Zhangjiagang Pohang Stainless Steel Company (ZPSS), as part of a broader restructuring programme designed to focus or profitable businesses, according to local reports.
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The company is reported to have sold its 82.5% stake in stainless steel maker ZPSS to the local Tsingshan Holding Group, in a deal valued at around KRW 400 billion (US$ 291 million). China’s Jiangsu Shagang Group is understood to still hold the remaining 17.5% of the equity in ZPSS.
ZPSS, Posco’s first overseas integrated stainless steel operation, has a production capacity of 1.1 million metric tons of steel per year – reportedly more than half of South Korea’s total stainless steel output.
Price competition in China’s steel industry, where there is significant overcapacity, has kept margins low. Last year, under its chairman Chang In-hwa, Posco began to restructure its global operations to focus on high-growth regions, including the US and India, and to sell off its underperforming operations.
