(Yicai Global) Dec. 10 -- China's second-largest steelmaker HBIS Group and South Korea's largest, Posco, plan to set up a joint venture in China to produce sheet metal for the high-end auto market.

The pair penned an agreement to establish the firm in HBIS's home province of Hebei, the state-owned Chinese partner said in a statement today without disclosing financial or shareholding details. The joint venture will utilize HBIS's cold rolling facility in Laoting, Tangshan.

Working together will help HBIS and Posco, the world's most competitive steel enterprise according to World Steel Dynamic, "better seize opportunities in the Chinese automobile market," the statement added.

HBIS, the result of a 2008 merger between Tangshan Iron and Steel Group and Handan Iron and Steel Group, supplied over 7 million tons of automotive steel last year to rank second behind only China Baowu Steel Group in the domestic market.

The firm makes cold rolled and galvanized panels for all parts of a vehicle's structure, as well as metal for auto parts, and ranked 214th on this year's Fortune Global 500. It made CNY336.8 billion (USD47.8 billion) in revenue and had 120,000 employees worldwide as of the end of 2018.

HBIS and Posco have been working and strategizing together since 2017 in the raw materials, technology and environmental protection fields, according to the statement. They began discussing potential joint investments in automotive steel earlier this year.

Editor: James Boynton