Deal with Swiss trader will help company expand overseas presence

Hebei Iron and Steel Group Co Ltd has taken a controlling stake in Switzerland-based Duferco International Trading Holding, a move that will help China's largest steel producer expand its presence in the global markets.

The two companies signed an agreement to the effect on Tuesday whereby HBIS will acquire a 51 percent stake in DITH, the biggest steel trader in the world. The two companies, however, did not disclose the total value of the deal.

As part of the agreement, HBIS will use DITH's global marketing and distribution presence to further enhance its position as a global steel supplier, said Hebei Steel sources.

Yu Yong, president of HBIS, said that the "going global" strategy is an inevitable and important step for the company's future development.

In March 2013, HBIS's subsidiary Tangshan Iron and Steel Group Co, or Tangsteel, acquired a 10 percent stake in Duferco.

"It's a logical and organic process for Duferco to expand its cooperation with Tangsteel and then to its parent company," said Matthew De Morgan, chief executive officer of Duferco.

The center of gravity in the global steel industryhas shifted to Asia and the partnership will provide Duferco with unparalleled access to an essential region and the industry as a whole, De Morgan said.

DITH will help Tangsteel sell 3 million metric tons of steel products this year in overseas markets, he said.

According to Tangsteel officials, about 30 percent of the steel products produced by the company during the first six months of the year have found their way to the overseas markets.