ThyssenKrupp Pursues Bullish China Markets

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Last updated at: (Beijing Time) Tuesday, November 20, 2001

ThyssenKrupp Pursues Bullish China Markets

Germany-based industrial giant ThyssenKrupp AG expects its business in China to grow by a large margin over the next few years as its gigantic investment plans will take effect in the near future, against the background of China's recent entry into the World Trade Organization.

��As an example of the close Sino-German economic relationship, visiting German Chancellor Gerhard Schroeder earlier this month attended a ceremony marking the start of production of the Shanghai Krupp Stainless Co., Ltd. (SKS), ThyssenKrupp's largest joint venture in Asia.

��The cold-rolling mill of the first-phase project has six production lines involving a total investment of about 295 millionUS dollars. It will produce 72,000 tons of rolled stainless steel sheeting annually.

��ThyssenKrupp and the Shanghai Baogang Group Company signed the contract in December 1997 for the stainless steel project, China'sbiggest joint venture in the iron and steel industry so far. The co-funded company, which involves a total investment of 1.43 billion US dollars and went into construction in April 1998, will produce 440,000 tons of stainless steel strip and sheet annually.

��The Duisburg-based company said the SKS second phase will involve the installation of a second cold-rolling facility and an annealing and pickling line. ThyssenKrupp controls 60 percent of SKS, and the Shanghai Pudong Iron & Steel 40 percent. SKS is expected to be fully operational by 2006.

ThyssenKrupp's stainless steel investment is taking place against the background of an extremely attractive market environment in China, as the volume of business for stainless steel flat products in the country has risen to around 1.4 milliontons each year with continuingly strong growth rates

��Although China's domestic production has risen too, 70 percent of the demand for stainless steel flat products is still covered by imports, which means optimum prospects for SKS in the future, according to a ThyssenKrupp spokesman.

��For the previous fiscal year, the company's annual sales revenue in China reached 364 million euros, 71 percent of which came from sales of carbon steel, stainless steel and other materials.

��Dr. Middelmann, vice-chairman of the executive board of ThyssenKrupp, praised the company's cooperation with the Shanghai Maglev Transportation Company as a milestone in its development strategy in Asia.

��A German consortium's contract project to build a high-tech magnetic levitation train in Shanghai involves ThyssenKrupp, the engineering giant Siemens and train builder Adtranz, owned by DaimlerChrysler.

��The route, which will be about 30 kilometers long, will connectthe Pudong International Airport with the center of Shanghai in less than 10 minutes, as the trains will be able to reach speeds of more than 400 kilometers per hour, as fast as a jet plane.

The Shanghai project will be the first time that such technology will be put into commercial use, although Germany has spent decades and billions of dollars in developing the Maglev system, as has Japan.

��Meanwhile, ThyssenKrupp has signed contracts with another majorChinese iron and steel manufacturer to jointly produce galvanized plates in Dalian, a port city in northeast China's Liaoning Province.

��Under the deals, the Angang New Steel Company Ltd. and ThyssenKrupp AG will invest nearly 180 million U.S. dollars in thejoint venture, which will be put into operation in May, 2003, to provide 320,000 tons of galvanized plate for automobiles and 80,000 tons of plate for household use.

��The Angang New Steel Company Ltd., the holding company of the Anshan Iron and Steel Group, was named one of China's top 50 listed companies last year.

��ThyssenKrupp has so far funded nine joint ventures in China, including SKS in Shanghai, two car parts plants in Shanghai and Liaoyang, respectively, two elevator manufacturing and service factories in Shanghai and Zhongshan in Guangdong, respectively, a machine tool factory in Shanghai and three materials trading companies in Tianjin and Hong Kong.

��Holding a leading international position in steel and machinery,with 700 enterprises worldwide and an annual sales revenue of over37 billion euros, ThyssenKrupp established its business links withChina more than 100 years ago.

��It set up its first sales office in Shanghai in 1870, selling the country its first locomotive. The company rejuvenated its relations with China by setting up a representative office in Beijing in 1980. Since then, their relations have been on a fast track.