The small cans triggered the competition between Baosteel and Wuhan Steel's two major steel companies in Wuhan. Yesterday, Wuhan Baosteel Can Making Co., Ltd. held its opening ceremony in the Wuhan Development Zone. Interestingly, just five days ago, Wuhan Iron & Steel had just joined hands with Nippon Steel to establish a tinplate company.

The total investment of the Wuhan Baosteel Can Making Project is 252 million yuan. The annual average production capacity is 480 million cans, and the sales revenue can reach 300 million yuan. This is Baosteel's 5th can making factory nationwide. The sales area will cover six provinces in Central China, and use the location advantage of Wuhan to radiate the national market.

Wugang Nippon Steel Tinplate Co., Ltd. invests approximately 1.85 billion yuan, and has an annual production capacity of 200,000 tons of tinplate. It is mainly used in food canning industry including cans. It is predicted that the demand for canned food and beverages in China will increase substantially. The demand for tinplate in China will increase from 2.32 million tons in 2009 to 3.7 million tons in 2015, with an average annual growth rate of 7%-8%. The largest tinplate manufacturer in China is a joint venture project of Shanghai Baosteel Group and Wuhan Iron and Steel Corporation's Nippon Steel Corporation, which is trying to seize this market.

At present, Baosteel has taken a step forward in the food packaging industry. Wuhan Baosteel Can Making has established business relationships with such brands as Coca Cola, Pepsi, Tsingtao Brewery, and JDB.

Experts in the industry said that the two major steel companies inevitably seized the food packaging market, it is forced by the low profit margin of the steel industry, have vigorously expanded the "non-steel industry." Under the new situation in which the global steel industry has entered a new round of adjustment, the competition between Wuhan Iron and Steel and Baosteel will help expand China's high-end food and beverage cans market.