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October
2, 2000
Nisshin Steel Co., Ltd. |
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| Nisshin
Steel to Participate in Phase 2 Project for Ningbo Baoxin Stainless Steel |
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Nisshin Steel
established a joint venture, Ningbo Baoxin Stainless Steel Co., Ltd., in
Ningbo, Zhejiang Province, China, to develop a base for its stainless business
in China. The venture has Hanwa Co., Ltd., and Mitsui & Co., Ltd., as its
Japanese partners and the Shanghai Baosteel Group Corporation and the city
of Ningbo as its Chinese partners. Cold-rolling facilities with an annual
production capacity of 80,000 metric tons were completed in December 1998.
Nisshin Steel, after studying expansion under the second phase of the venture's
development, has decided to go ahead with the plans as outlined below. As a result of technical assistance from Nisshin Steel, operations at Ningbo Baoxin are proceeding smoothly. Annual production in 1999 was 50,000 metric tons of stainless steel, and forecasts for 2000 call for continued full-scale operations with a total annual production of 80,000 metric tons. Business results have also been good, with the company recording its first month of profitability in August 1999 and expecting significant profit growth in 2000. Based on these results and expectations of further growth in demand for stainless steel in the Chinese market, Nisshin Steel and other investors in the venture have reached the agreement described below. With this decision to further develop operations in China, and the October 1999 decision to increase the Company's holdings in ACERINOX, S.A. of Spain from 9.66% to 12.00%, Nisshin Steel is steadily building a global network of stainless steel operations. Outline of Nisshin Steel's Participation in Phase 2 Project for Ningbo Baoxin Stainless Steel Co., Ltd. 1. Description: Construction of second-stage cold-rolling stainless steel production facilities (1) Production Capacity: 80,000 metric tons a year* of cold-rolled stainless steel products (2) Principal Facilities: Cold-rolling mill (1), annealing and pickling line (1), bright annealing line (1) * Together with the current production capacity of 80,000 metric tons a year, the total production capacity for cold-rolled stainless steel products will be 160,000 metric tons a year. 2. Construction Site: Ningbo, Zhejiang Province (in the same premises of the existing complex) 3. Expected Start of Operations: April 2003 4. Capital Investment: Approximately US$150 million 5. Capital Procurement: Capital increase by current investors and loans from financial institutions Nisshin Steel's portion of the capital increase will be approximately 1.3 billion yen. 6. Note: Nisshin Steel also plans to provide technical assistance to the venture during the second stage of the project. (Reference) About Ningbo Baoxin Stainless Steel Co., Ltd. 1. Historical Outline April 1996: Feasibility studies launched following approaches from Shanghai Baosteel Group Corporation November 1996: Agreement reached to form joint venture May 1997: Start of Phase I construction November 1998: Hot run initiated December 1998: Completion of construction 2. Company Outline Corporate Name: Ningbo Baoxin Stainless Steel Co., Ltd. Established: March 1996 Location: Ningbo, Zhejiang Province, China Paid-in Capital: US$126 million Investors: Shanghai Baosteel Group Corporation : 54% Nisshin Steel Co., Ltd.: 20% City of Ningbo: 12% Hanwa Co., Ltd.: 7% Mitsui & Co., Ltd.: 7% Production Capacity: Cold-rolled stainless steel: 80,000 metric tons per year Principal Facilities: Cold-rolling mill (1), annealing and pickling line (1), skinpass mill (1) Employees: Approximately 400 |
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