Steel pipe producer Yalian Steel Corp. has secured a C$27.5 million credit line that will help in the construction of a plant in Yangzhou, located in Jiangsu province in China. The Vancouver-based company said Wednesday the deal is a three-year term and carries an interest rate of 5.4 per cent with the Agricultural Bank of China. It will be secured by land use rights and/or other physical assets, as required.
Yalian Steel has drawn an initial $6.5 million to fund the final phase of the production plant. It will produce welded steel pipe used for the energy pipelines market in China. The plant is designed to produce 150,000 to 200,000 tonnes of steel pipe a year, but is expected to have an annual output of only 110,000 tonnes during its first year.
Yalian Steel remains positive on its outlook in China as "the government continues to make significant investments to support the growing demand for energy, and therefore the company feels the market for its products will be extremely robust for the foreseeable future."
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