A number of Chinese steelmakers are making serious expansions into the "non-steel" sectors, as they deem this is the way to survive the meager profit margin from their traditional business, the 21st Century Business Herald reported.

A month ago, a subsidiary of Wuhan Iron & Steel Group, China's third-biggest steelmaker, showcased 38 wine products and 29 olive oil products at a national food expo, marking the official entrance of the group into the food sector.

It is reported that the group, a world top 500 company, plans to let "non-steel" operations to account for 30 percent of its total business by the end of the nation's 12th Five-Year Plan, instead of the current eight percent.

The giant steelmaker is not alone in this fight. Heavyweight private steelmaker, Hebei Jinxi Iron & Steel, and China's largest steelmaker, Baosteel Group, have all planned to expand into "non-steel" sectors.

The targets range from mining, metal processing, machinery manufacturing, waste recycling and energy-saving projects to the more irrelevant, but lucrative, sectors of real estate, finance, and food production.

Such pursuits are made for a good reason. Rising production costs, dwindling demand, overcapacity and stiff competition have taken a combined toll on Chinese steelmakers' profit margin.

Figures from the China Iron and Steel Association (CISA) showed that the profit margin of China's big and medium-sized steelmakers stood at a mere 2.58 percent for the first 10 months of 2010. Such a figure indicated that a large number of steelmakers are in the red.

CISA Secretary-General Shan Shanghua said steelmakers' operation of "non-steel" sectors should in no way mean that they are walking out of their traditional pillar industries; however, such operations should develop in accordance with the main business to tap the potential of the industry chain.

It is reported that the Wuhan Iron & Steel Group plans to use the overseas market channel it established for selling steel to sell its food products.