China's Shagang Group to increase steel capacity to 25 mln tons - report

Jiangsu Shagang Group, China's largest privately owned steel maker, is expected to increase annual capacity by 5 pct to 25 mln tons following a purchase of a 25 pct stake in Jiangsu Yonggang Group, the official Caijing Magazine reported.

Shagang will become Yonggang's controlling shareholder after the transaction, the report said, without providing financial details.

It said Shagang will also become China's second-largest steel maker by capacity, following Baosteel Group.

Yonggang Group booked 2007 revenue of 25 bln yuan, up from 16.3 bln in 2006, according to the report.

Both Shagang and Yonggang are located in Zhangjiagang in eastern China's Jiangsu province.

(1 usd = 7.30 yuan)