From steel to space: China giant sells first 2 satellites as bold pivot bears fruit

Jigang Group spent decades forging the metal for China’s infrastructure boom. Now, the former industrial titan is building hardware for the final frontier.\nThe state-owned company, once one of the nation’s top steel producers, has secured orders for its first two satellites – an all-important step in its years-long transformation to capture demand in the country’s burgeoning commercial space industry.\nReporting this week on the purchase, the Economic Observer said production was expected to begin this month at the company’s new satellite-assembly base in Jinan, the provincial capital of Shandong. No buyer names were given, and it was unclear if multiple buyers were involved.\n“In 2017, Jigang Group – once China’s seventh-largest steel producer – shut down its furnaces, phased out 10 million tonnes of production capacity, and embarked on a path of transformation,” Zhao Liang, the project head at the firm’s subsidiary, the Jinan Satellite Industry Development Group, told the paper.\nYears in the making, the transition was marked by a 450 million yuan (US$62 million) investment in 2023 to establish the satellite-assembly base and position the firm in the aerospace supply chain.\nThree months ago, the Jinan government said the base was set for production. Authorities noted that it could already produce up to 20 satellites a year, each weighing about 500kg (1,100lbs).\n“Within three years, its output is expected to reach 100 satellites per year, supporting the deployment and replenishment of commercial satellite constellations,” the official statement said on September 8. “The base’s core capabilities lie in assembly, environmental testing and satellite electrical testing, encompassing storage, fault handling and comprehensive testing and data processing.”\n\n\nAs Jigang Group tries to secure enough sales to fully utilise its new production capabilities, the move reflects a broader push into the commercial space sector, driven by supportive industrial policies and local investments.\nAs of November, China had more than 90,000 space-related companies, with nearly 60 per cent founded in the past three years, according to corporate database Qichacha.\nThe 500kg class of “small” satellites is a segment with relatively low financial and technical barriers. Their compact size, simpler production processes and more flexible launch options make them more accessible and affordable for a wide range of companies and institutions.\nThe industry surpassed a market value of 1 trillion yuan (US$141 billion) in 2020 and has since maintained steady growth, with a compound annual growth rate of around 22 per cent, according to an analysis by the China Centre for Information Industry Development, as cited by Xinhua.\nThat would put the market value of China’s commercial space industry at 2.8 trillion yuan (US$396.2 billion) for 2025, according to the centre, which is under China’s Ministry of Industry and Information Technology.\nIn comparison, the global commercial space market is projected to exceed US$700 billion by 2025, according to forecasts cited by the Economic Information Daily.\nTo manage such rapid growth, the China National Space Administration recently established a new department dedicated to overseeing the commercial space sector, Xinhua reported on Saturday.\nWith Jigang’s new satellite-assembly base in Jinan geared to go, it has partnered with local authorities to establish an investment fund to lure suppliers, project head Zhao told the Economic Observer.\nAccording to the report, the company’s satellites could address market demands across a range of sectors, including agriculture and rural development, urban governance, smart water management, emergency response, transport, and national defence and military affairs.\nOther companies, from automotive to telecommunications, are also entering the fray.\nGeely Technology Group – a unit of Geely, one of China’s leading carmakers – says on its website that its “world’s first” factory for mass-producing satellites in Zhejiang province combines aerospace and automotive mass-production techniques.\nThe facility, dubbed a “satellite super factory”, is said to have shortened satellite-production cycles to under 28 days and reduced costs by about 45 per cent, with an annual output of up to 500 units.\n