Beijing steelmaker halts production in capital

Updated: 2011-01-13 15:47
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BEIJING - Shougang Group, a heavyweight steel maker in China, on Thursday announced it had halted all its steel-making operations in the nation's capital.

A shutdown ceremony was held Thursday morning in Shougang's Shijingshan site in western Beijing, marking the end of the company's plant that had an annual production capacity of 8-million-tonnes.

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The company has built a 21-square-kilometer new plant in Caofeidian, an islet 220 km east of Beijing in Bohai Bay, to replace Shougang's old facilities.

Vice Premier Zhang Dejiang attended the ceremony, saying the relocation was significant as it is the first steelmaker to have moved from a big city to a coastal area.

"The relocation has strategic significance in promoting the restructure of the iron and steel industry, and transformation of urban functions," said Zhang.

China has encouraged steelmakers to build factories in coastal areas to take advantage of ports to minimize the purchasing cost of iron ore.

Founded in 1919, Shougang once hit a record of 10 million tonnes of annual output, with more than 200,000 workers at the peak.

It was located in Shijingshan District, 17 km away from Tian'anmen, central Beijing. With the city's rapid urbanization over the past decades, the site -- once on the outskirts -- became part of the urban area.

After approved by the National Development and Reform Commission in 2005, Shougang initiated its relocation program, the largest industrial relocation in China since the 1960s.

Beijing Municipal Government formed a unit to oversee the shutdown. It took more than two years to bring operations completely to a halt, said Li Yan, chief of Shougang's production department in charge of the halting program.