News Release > 2007 > A Basic Agreement on the Cold Rolling Mill Project in Guangzhou Nansha Development Zone in the city of Guangzhou, China has been reached.- JFE Steel Corporation
A Basic Agreement on the Cold Rolling Mill Project in Guangzhou Nansha Development
Zone in the city of Guangzhou, China has been reached.
JFE Steel Corporation and Guangzhou Iron and Steel Enterprises Holdings Ltd. established Guangzhou JFE Steel Sheet Company Ltd. (GJSS), a joint venture to produce and market hot-dip galvanized steel sheets primarily for the automobile industry in China in the fall of 2003, and completed the construction of the No. 1 Continuous Galvanizing Line (CGL) with a capacity of 400,000 tons per year in March 2006. Today, GJSS held an opening ceremony in Guangzhou.
In order to meet the demand for high quality automotive steel sheets, which is expected to continue to rise, JFE Steel and Guangzhou Iron and Steel today reached an agreement to expand the business of GJSS and build additional production facilities including: (1) Cold Rolling Mill, (2) Continuous Annealing Line, and (3) No. 2 CGL.At the time, along with an additional capital investment, the ownership of GJSS will be changed to JFE Steel 50%, and Guangzhou Iron & Steel 50%.
Following the agreement, the two companies will continue to work out the details and, after obtaining approvals from governmental organizations in China, expect to conclude an official joint venture agreement. The companies plan to commence construction in 2007 with completion expected around 2010.
<Outline of the New Production Facilities>
| (1) Cold Rolling Mill (PL – TCM) | 1.8 million tons / year | |
| (2) Continuous Annealing Line (CAL) |
1.0 million tons / year | |
| (3) No. 2 Continuous Galvanizing Line
(CGL) |
0.4 million tons / year |
<Outline of Guangzhou JFE Steel Sheet Company Ltd.>
| (1) | Head office: Wanqingsha, Nansha District, Guangzhou City, Guangdong Province | |
| (2) | Chairman: Zhang Wei Tao | |
| (3) | President: Satoshi Kasai (dispatched from JFE Steel) | |
| (4) | Production facilities: Hot-dip Galvanizing Line (400,000 tons / year) | |
| (5) | Products: Hot-dip galvanized steel sheets
(mainly for the automotive industry,
some for electric appliance and construction applications) |
|
| (6) | Employees: Approximately 200 | |
| (7) | Plant location: Nansha Development Zone, Guangzhou City, Guangdong Province | |
| (8) | Total investment: Approximately 170 million US dollars | |
| (9) | Registered capital: Approximately 76 million US dollars | |
| (10) | Current ownership: JFE Steel Corporation | 51% |
Guangzhou Iron and Steel Enterprises Holdings Ltd. |
49% | |
<Outline of Guangzhou Iron and Steel Enterprises Holdings Ltd.>
| • | A group of state enterprises founded in 1958 |
| (1) Head office: Liwan District, Guangzhou City,
Guangdong Province (2) Chairman: Chen Jia Ling (3) President: Zhang Ruo Sheng (4) Capital: 2.2 billion yuan (capitalized entirely by the city of Guangzhou) (5) Turnover: 20.9 billion yuan (2006) |
|
| • | The group is centered on the three core steel companies, Guangzhou Iron and Steel Co. Ltd., Guangzhou Zhujiang Steel Co. Ltd., Guangzhou Non-ferrous Metals Group. |
| • | The group produced 3.31 million tons of crude steel in 2006. Its main products are deformed bars, bars, and hot rolled coils, and non-ferrous metals (copper, aluminum, zinc, etc.). |
As we announced on September 22, 2003, the two companies agreed to conduct a feasibility study on a joint venture of cold rolling mill project with the hot-dip galvanizing line joint venture as a first step. The two companies conducted the study and came to an agreement today.
For further information, please contact:
Public Relations Section, General Administration Dept.
JFE Steel Corporation
Tel: +81-3-3597-3166
