China's Baoshan Iron & Steel (Baosteel ), the country's largest listed steelmaker, will start construction on its new branch in Zhanjiang, Guangdong province after cutting the budget by 40 percent, Shanghai -based China Business News reported on Thursday.

Investment in Baosteel's Zhanjiang project has been cut to 41.5 billion yuan ($6.65 billion) from 69.68 billion yuan, CBN said. The project was approved by the National Development and Reform Commission in May who viewed it as an important step by Baosteel to transfer production to the coastal region to save costs.

"Our target is to build the Zhanjiang branch into a carbon steel plate facto ry with the highest efficiency in world," Ma was quoted as saying.

He said production in Zhanjiang will start in 2015. Baosteel's manufacturing base in Shanghai will shift to high-end manufacturing to meet the need for home appliance s.

Ma said the company is confident that the Zhanjiang branch will be profitable six months after production starts.

The company posted a 41 percent rise in 2012 net profit, helped by a one-off sale of asse ts. Net profit was 10.39 billion yuan, compared with 7.36 billion yuan a year earlier, Baosteel said in a filing with the Shanghai Stock Exchange in late March.