Although Zhanjiang people have always taken pride in their deep-water port, the port can only ever realize its potential through the development of related industries to lift the city's economy to a higher level, said the city's mayor Wang Zhongbing.

Technologically advanced steel and papermaking complexes and refineries, mostly located on the city's Donghai Island, form the vanguard of transforming Zhanjiang into a central city in Beibu Bay with an advanced manufacturing industry, he said in a media interview last week.

Although the steel sector is burdened with excessive capacity in general in China at present, Baosteel Zhanjiang Steel Co has been built in an aim to eliminate obsolete capacity in Guangdong province and Shanghai.

The complex mainly supplies steel for automobile and home appliance manufacturing, ship building and oil production sectors.

Baosteel Zhanjiang Steel Co, with its first blast furnace going into operation in September of last year and its second this July, is meeting market demand, Wang said.

The projects are meant to serve mainly South China and Southeast Asian markets with high-quality steel sheets, said Xia Zhengda, director of the corporate culture department at Baosteel Zhanjiang. The company has also exported pipe products to India.

The shorter distance to the market is complimented by cost slashed by shorter shipping distance between Zhanjiang port and Australia and Brazil, where iron ore comes from, he said.

Production at the plant is controlled by Baosteel Group, a Shanghai-based supplier of steel sheets for about half of vehicles made in the country.

With its second blast furnace going into operation only in July, the company is expected to reach an annual capacity of 8 million metric tons of steel products next year.

Every one yuan ($0.15) invested in a steel plant is estimated to result in 5 yuan invested in other related sectors, according to Xia.

"The steel industry in China needs to actively cut capacity. Baosteel Zhanjiang has been a result of phasing out obsolete capacity in Guangdong and adjusting the capacity in Shanghai," Xia said.

"The steel base in Zhanjiang will play an important role in decreasing regional capacity, optimizing the country's steel industrial layout and promoting structural adjustments," he added.

Besides, Wang said Baosteel Zhanjiang is fulfilling all its environmental commitments. "I have confidence that it will stand as an ecologically friendly facility."

Of the company's combined 50 billion yuan investment, 6.4 billion yuan is allocated to the development and implementation of environmental technologies and equipment, according to Xia.

Even the products themselves are environmentally friendly, Xia said. For example, lighter automobile sheets mean lower emissions by cars on the road.

The relatively short delivery distance also means lower emissions during transport.

Baosteel Zhanjiang was the first steel company in China to apply the strictest environmental regulations, with advanced environmental equipment. In the total investment for the plant, environmental expenditures make up 720 yuan for each ton of steel produced.

What is more, resources produced during steel manufacturing, such as coal gas, may by shared by neighboring refinery to be built, based on the principle of circular economy.

The construction of a new refinery is scheduled to kick off next month.

"It is the result of prudent technological, market and efficiency assessments by Sinopec to optimize design," Wang said.

With investment of about 40 billion yuan, the project is designed to process 15 million tons of crude oil and 800,000 tons of ethylene every year.

To meet the demands, the shipping capacity of Zhanjiang Port will be expanded from 300,000 tons to 400,000 tons, with more container berths to be built at the Baoman harbor area. Port capacity will also be expanded at Donghai Island, mainly for serving the steel, refinery and papermaking establishments.

Zhanjiang Port handled 220 million tons of goods last year, which remained dominated by bulk cargoes. Container throughput stood at 601,200 units last year.

To better tap the port's capacity and boost container traffic, the city is considering cooperation with other ports and opening more shipping lines, Wang said.

liwenfang@chinadaily.com.cn

(China Daily 11/29/2016 page22)