Decision on Comat rescue expected at end of the month

Chinese packaging steel mill Jiangyin Comat Metal Products may reopen at the end of this month, depending on the outcome of talks which are hoped will rescue it from a financial crisis.

Comat’s mills remain closed months after debt troubles at its parent company halted the production of tinplate for canmakers throughout the world.

The facilities didn’t reopen as forecast after the abatement of the Covid-19 coronavirus, whose outbreak shuttered much of the nation’s industry, a source close to the company told The Canmaker.

And as talks over a rescue plan with the Chinese government continue, Comat has held off from a bankruptcy filing, the source said.

Comat’s lines were brought to a halt late last year as courts and financiers sought a solution to the debt woes of Haida Group, the manufacturer’s parent, which is believed to owe more than CNY10 billion (US$1.46bn). A company called Aikang Technology, known as AKCOME, has stood as guarantor of debts that remain unpaid.

Sources said Comat had overstretched itself financially with huge investments and expansion plans.

Comat was formed in 2005 and rapidly grew to become the largest privately-owned producer of tinplate in China. As of January last year, it was producing 800,000 tonnes of steel for food, beverage and general line canmakers and had plans to increase that to a 1mt with the addition of more annealing lines and rolling mills.

It was also looking to expand production of polyester-coated metal to cash in on growing demand for laminated steel, a plan that’s been shelved, said one source. Comat’s sole steel supplier is the state-owned giant Baosteel.