Business Areas
CITIC Pacific is a diversified company with a primary focus on special steel manufacturing, property and iron ore mining, which supplies the raw material needed in the making of special steel and property development in mainland China. CITIC Pacific's operating segments include special steel, iron ore mining, property, civil infrastructure, power generation and other business areas. CITIC Pacific's subsidiaries include CITIC Pacific Mining, CITIC Pacific Special Steel, Dah Chong Hong Holdings Limited (DCH Holdings) and CITIC Telecom International. DCH Holdings is a distributor of motor vehicles, food and consumer products. CITIC Telecom International owns and operates a telecoms hub that provides interoperability, interconnections and value-added services.
On March 3 2011, CITIC Pacific announced its results for the full-year ended 31 December 2010. Profit attributable to shareholders was HK$8,915 million, the second highest in CITIC Pacific’s history. All operating business segments performed well, in particular special steel. The increase in profit was also driven by the gains from sales of assets, which totalled HK$3,008 million.
The Sino Iron project is being developed by CITIC Pacific Mining, a wholly owned subsidiary of CITIC Pacific. It is located at Cape Preston, 100 kilometres southwest of Karratha on the coast of Western Australia’s North Western region of the Pilbara. The Sino Iron project will mine magnetite iron ore that once processed, can be exported for use in the steelmaking process, where it is a desirable quality product for steel mills, including those of CITIC Pacific in China.
The Sino Iron project is intended to help satisfy demand from China’s steelmaking industry by providing a reliable source of high quality iron concentrate. The products from the Sino Iron project will not only be used in CITIC Pacific’s special steel mills in China, but also in other Chinese steel mills. One of the advantages of magnetite concentrate is its high iron content and low impurities compared to traditional iron ore products.
The project was conceived in 2006 with a total cost of under $2 billion. However costs by 2012 had reached $7.1 billion, leading to disputes among the partners of the project. In July 2012, with production due to begin within weeks, the budget was increased further to 8 billion USD. The increase was attributed to lengthy delays, cost overruns, the rising Australian dollar, labour shortages and the introduction of the carbon and mining taxes.
As one of CITIC Pacific's main businesses, CITIC Pacific Special Steel is the largest manufacturer dedicated to the production of special steel in China with two operating steel plants – Xingcheng Special Steel and Xin Yegang. Through expansion, the company’s annual steel producing capacity increased to eight million tonnes at the end of 2010. This will grow to nine million tonnes by the end of 2011. The two steel plants are ideally located to cover the main markets for special steel in eastern and central China. Major products include the following categories: bar steel, wire steel, mid to thick wall seamless steel tubes, special steel plates and special forging steel. These are widely used in various industries, including auto components, machinery manufacturing, oil and petrochemicals, transportation, energy, railways and shipbuilding.
On the property line of business, most of CITIC Pacific’s properties are large-scale projects with locations in mainland China. These include Shanghai’s Lu Jia Zui New Financial District project, the Sichuan Beilu Station and The Centre in Jiading, which form part of the city’s new railway transport system. Zhujiajiao New Town in Shanghai and Noble Manor in Yangzhou are large-scale residential developments offering comprehensive community facilities. Our Shenzhou Peninsula project on Hainan Island will benefit from the government’s plan to promote the island as an international tourism destination.CITIC Pacific 2010 Annual Report
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