Bisalloy Steel Group (ASX: BIS) has been well supported by the market after being released from a trading halt, with the company's shares trading 55% higher in intra-day trade after entering into a joint venture with a leading Chinese steel producer.
The 50:50 joint venture will be with Jinan Iron & Steel Co (Jinan) (SHA: 600022), a subsidiary of one of China's top 10 steel producing groups, Shandong Iron & Steel Group Co, to more than double Bisalloy’s manufacturing capacity to over 150,000 tonnes.
The major growth initiatives are for the production, sale and distribution of quenched and tempered (Q&T) steel plate into the People’s Republic of China (PRC) and other international markets under the Bisplate brand.
Currently Bisalloy Steel is Australia’s only manufacturer of Q&T steel plate, with the distribution network now set to expand from just locally, Indonesia and Thailand - to the massive Chinese market.
Under the terms of the joint venture, Bisalloy will contribute US$1 million in capital and licence the company's Q&T intellectual property and brand name to the joint venture to produce the plate at Jinan’s internationally competitive production facility in Shandong Province, PRC.
Robert Terpening, Bisalloy managing director, said “Our manufacturing facility in Australia remains an important base for us, and supply to existing customers will be largely unaffected.
"The additional capacity produced through the JV will be directed to building our presence in PRC and new international markets."