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Sunday, November 04, 2001, updated at 11:00(GMT+8) | ||||||||||||||
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Schroeder Congratulates Start of Production of Sino-German Steel JVGerman Chancellor Gerhard Schroeder and Shanghai Mayor Xu Kuangdi Friday visited Shanghai Grupp Stainless to witness the production of the first cold-rolled stainless steel sheets from the Sino-German steel joint venture.As China's largest steel industry joint venture, the company will supply the world's most vigorous steel market in China. Schroeder congratulated the start of production saying that the success of the project has sent a signal that Germany is confident of the healthy development of the Chinese market and the Chinese economy. A symbolistic auction for the first roll of steel was held today to indicate the great market prospects for the products. The contract of the joint venture project was inked at the end of 1997 involving a total investment of 1.4 billion U.S. dollars with the German Grupp Thyssen Co. taking 60 percent of the shares. The Chinese partner is the Pudong Iron and Steel Co. Ltd, a subsidiary of the Shanghai Baogang Group. Today's inauguration marks the start of the first phase project funded with 295 million U.S. dollars, which is designed to have an annual production capacity of 72,000 tons of stainless steel. China's annual demand for stainless steel sheets is estimated at 1.5 million tons, with 70 percent coming on imports. Insiders expect the products of Shanghai Grupp Stainless to have bright market potential. The international iron and steel market is experiencing a downfall with market quotations for major products falling to record lows. Leading steel producers are looking for new solutions. With a steady and high market demand and China's pending entry into the World Trade Organization, the country has become a market magnet for international steel giants. The second phase project of the Sino-German joint venture, to begin soon, will be operational by 2004, when the total production capacity will be increased to 160,000 tons. The Shanghai Baogang Group aiming to make its way into the world's Top 500 companies in four to five years has vowed to continue the cooperation with Grupp Thyssen in order to update the steel production facilities with German technology.
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