The mainland's largest stainless steel maker Taiyuan Iron and Steel (Group) Co (Tisco) is to invest about 720 million yuan (HK$670.17 million) to increase its share in the nation's stainless steel market which relies heavily on imports.
The company, which produces steel sheets and plates in Shanxi, formed a subsidiary, Taiyuan Stainless Steel, to issue 250 million A shares.
Tisco president Liu Yutang said the initial public offering in Shenzhen in May had raised about 1.05 billion yuan and 720 million yuan of the proceeds would be invested in the two production lines.
Mr Liu said Taiyuan Stainless had a production capacity of 150,000 tonnes a year but only between 70,000 and 80,000 tonnes would be produced this year due to an influx of imports.
Foreign products with similar prices had swamped the mainland stainless steel market with imports from Japan, South Korea, Taiwan, the United States and Europe occupying two-thirds of domestic consumption, Mr Liu said.
He said the mainland steel industry had been on decline since 1993 and would take another three years to rebound.