Eonmetall Group Berhad said Jan. 3 a subsidiary, Shaanxi Longxing Steel Co. Ltd., was incorporated as a limited liability company in China on Oct. 24, 2018.
The incorporation is part of the company's strategy to directly invest and participate in downstream steel production activities in China, it noted. Shaanxi Longxing is wholly owned by the company's 51%-owned unit Eonmetall China Sdn. Bhd.
The subsidiary deals in production, sales, import and export of steel products, machinery and equipment. It will start operations with an initial capital of US$20 million. Eonmetall China said it will finance its investment in Shaanxi Longxing through a mix of internal funds and bank borrowings.
The investment will not have material impact on the company's earnings for the financial year ending Dec. 31, 2019, until the start of the intended business activities, the company added.