Shanghai Krupp Stainless Co, the largest Sino-foreign steel joint venture in China, began production yesterday.
The planned production capacity of the company, formed by Shanghai-based Baosteel and Germany's Thyssen Krupp AG, includes 480,000 tons of hot-rolled stainless flat products and 268,000 tons of those cold-rolled. Those are targets by 2006, when its plant is at full production level.
Thyssen Krupp controls 60 per cent of the joint venture with a total investment of US$1.4 billion.
Shanghai Krupp General Manager Gerhard Mairhofer said most of the company's products will be sold in China.
Stainless steel flat products are in short supply on the Chinese market. The current demand is around 1.5 million tons a year, 70 per cent of which is imported at present.
Ulrich Middelmann, vice-chair of Thyssen Krupp AG, said on Thursday the Chinese market was of "prime importance" for the company because it had tremendous potential.
"The demand in China will grow by between 6 and 7 per cent annually (over the next several years)," Middelmann said.
The establishment of the joint venture, Thyssen Krupp's largest project in Asia, was a big step towards the company's local production strategy in China, he said.
Thyssen Krupp and Anshan Steel and Iron Co in Northeast China's Liaoning Province intend to set up a US$180 million joint venture to produce hot-dip galvanizing steel products for automobiles.
Thyssen Krupp now has nine joint ventures in China. Last year, the company reported US$364 million in sales here.
Baosteel Vice-President Ma Guoqiang said the launch of the Shanghai Krupp joint venture followed the company's goal to build itself into China's largest high-end steel production base by 2010.
"It will increase our competitiveness after China's expected entry into the World Trade Organization," Ma said.
Middelmann is one of members of a delegation led by visiting German Chancellor Gerhard Schroeder, whose trip to China ended yesterday.
(China Daily November 3, 2001)
