On July 25th, China Fortune News (Reporter Liu Mengran Zhang Liangde) reported that PIF (Saudi Public Investment Fund) has deepened its cooperation with Chinese companies. Today, Baosteel Corporation (600019.SH) announced that it will jointly invest with Saudi Aramco and PIF to establish Saudi Plate Company.

China Fortune News reporters noticed that this month, PIF and three other Chinese new energy companies established joint ventures, namely JinkoSolar (688223.SH), TCL Zhonghuan Renewable Energy Technology (002129.SZ) and Far East Holding Group. The cooperation projects involve upstream photovoltaic manufacturing and wind power equipment.

Tonight, Baosteel Corporation announced in the notice that to promote Saudi Arabia's "2030 Vision" and the "Belt and Road" initiative, Baosteel Corporation, Saudi Aramco and PIF plan to jointly invest in the establishment of Saudi Plate Company (temporary name) and build a green low-carbon plate factory in Saudi Arabia.

Currently, the Middle East is becoming a popular destination for Chinese manufacturing companies to "go global". Also tonight, solar cell manufacturer Hainan Drinda New Energy Technology (002865.SZ) announced that it plans to invest 280 million US dollars to build a 5GW high-efficiency battery production base project in Oman each year. Some listed company officials said that going abroad in groups in the industrial chain is also an effective way to solve the current imbalance between supply and demand in the photovoltaic industry.

The new plan for the Saudi Plate project has a total investment of 4.543 billion US dollars.

Baosteel Corporation announced after the close today that it will increase the investment in Saudi Plate Company, and the project's registered capital will be increased from the original 3,281.25 million riyals (equivalent to approximately 875 million US dollars or approximately 6.009 billion yuan) to 2 billion US dollars, an increase of 128.57%.

The shareholding ratio of all parties in the project remains unchanged. Baosteel Corporation's investment amount has been increased from the originally planned 0.4375 billion US dollars to 1 billion US dollars, holding 50% of the shares; Saudi Aramco and the Saudi Public Investment Fund's investment amount has been increased from the originally planned 0.82 billion riyals to 1.875 billion riyals (equivalent to approximately 0.5 billion US dollars), each holding 25% of the shares.

According to the announcement, the project's total investment is 4.543 billion US dollars. In addition to shareholders' contributions, Baosteel Corporation will provide financing guarantees not exceeding the proportion of equity (50%) for the joint venture company, and the amount of guaranteed loan principal will not exceed 1.067 billion US dollars.

The original plan of the project was to build a fully streamlined steel manufacturing base with an annual designed production capacity of 2.5 million tons of direct reduction iron and 1.5 million tons of thick plates. It is positioned to produce high-end thick plate products and mainly serves strategic industrial sectors such as oil and gas, shipbuilding, marine engineering, tank and pressure vessel manufacturing in the Middle East and North Africa. In the new project introduction, it is said that it will invest in and build the world's most competitive green low-carbon plate factory in Saudi Arabia, with an annual production of 2.5 million tons of direct reduction iron, 1.5 million tons of thick plates and 1.667 million tons of steel, mainly serving the oil and gas, shipbuilding, marine engineering and construction industries in the Middle East and North Africa.

The base was originally planned to be put into operation at the end of 2026. However, this newly disclosed project plan has added 1.667 million tons of steel production capacity, and has also extended customers to the construction industry field. Judging from the above-incremental contents, the project may increase the production line of building long materials or profiles.

Baosteel Corporation said that this project is a perfect fit for Saudi Arabia's "2030 Vision" and the "Belt and Road" initiative. It is an important measure for China Baowu and Baosteel Corporation to cultivate a world-class enterprise and promote internationalization strategy. It is also Baosteel Corporation's first overseas greenfield fully streamlined steel project.

Wang Guoqing, director of the Lange Steel Research Center, said that the Saudi project is a key link in Baosteel's international expansion strategy. As the world's main oil-producing region, the Middle East has a strong demand for steel for oil, gas and marine engineering. Baosteel's product quality has a significant market competitive advantage in the region, and it also helps promote the modernization process of the local steel industry while improving the two countries' relations.

The implementation of this project will help promote economic exchanges between China and Saudi Arabia and is expected to become a demonstration project for China-Saudi economic cooperation. In recent years, China and Saudi Arabia have strengthened their economic cooperation.

Listed companies are "going for gold" in the Middle East in groups.

In addition to Baosteel, many Chinese companies have recently announced investments in Saudi Arabia, and new energy is a hot field. In July of this year, JinkoSolar, TCL Zhonghuan, Far East Holding and other companies announced the establishment of a joint venture in Saudi Arabia. The announcement shows that JinkoSolar is building a 10GW high-efficiency battery and component project in Saudi Arabia, TCL Zhonghuan will build a 20GW photovoltaic crystal chip project, and the total investment is 0.985 billion US dollars and 2.08 billion US dollars, respectively. The investment projects are all in the form of joint ventures, and according to JinkoSolar and TCL Zhonghuan, PIF holds a 40% stake through its wholly-owned subsidiary RELC.

The person in charge of business of a listed company told Caixin reporter that going abroad with photovoltaic production capacity is a necessary route for development, and Saudi Arabia and other Middle Eastern countries are also proposing a local manufacturing plan. Upstream and downstream of the industrial chain go abroad together. Under the support of common values and concepts, a local supply chain can be established to better achieve sustainable development, which is also an effective way to solve the problem of the mismatch between supply and demand of photovoltaic production capacity.

After determining the Middle East as the next stop for photovoltaic production capacity to go abroad, more investment projects are starting. After announcing the plan to establish a battery factory in Oman in June this year, Hainan Drinda New Energy Technology quickly moved forward: the company announced in the evening that the investment operation and management body of the project have been established, which will be used to build a 5GW high-efficiency battery production base in Oman. The total planned investment of the project is 0.28 billion US dollars, and it is expected to be completed and put into production in 2025.

In mid-June of this year, the company announced that it had signed an "investment intention agreement" with Oman Investment Bureau to invest in and build a 10GW high-efficiency photovoltaic cell production capacity in Oman. The project is implemented in two phases, each with 5GW. The latest announcement shows that the company has established Jetex New Energy Technology (Oman) Suhal Free Zone Limited Company as the project body on July 17th this year, and the 5GW project is located in Suhal Free Zone, Oman, with a construction period of about 9 months.

Hainan Drinda New Energy Technology's main business is the production and sales of photovoltaic cells, and it shipped 19.21GW of battery products in the first half of the year (of which N-type shipped 16.43GW, accounting for 85.5%). As early as the beginning of this year, Hainan Drinda New Energy Technology expressed its intention to lay out overseas production capacity. From the sales ratio, in the first quarter, the company achieved overseas sales of 0.431 billion yuan, and overseas sales accounted for an increased proportion of 11.62%.

Hainan Drinda New Energy Technology's preferred overseas production base is Oman. The company believes that the location of the project is at the core of the Eurasian trade route, adjacent to the Middle East and Eurasian broad markets, and has strong international trade location advantages.

According to Hainan Drinda New Energy Technology, Oman has signed long-term free trade agreements with major Western countries, and Suhal Free Zone also has corresponding preferential policies for import and export businesses, which is conducive to the international sales of photovoltaic products produced by the company in Oman.