In anticipation of increased demand for stainless steel and other steel products in China, Nisshin Steel Co., Ltd., and Hanwa Co., Ltd., have been operating the Chang Fu Stainless Steel Center (Suzhou) Co., Ltd. coil center in Taicang City in the province of Jiangsu, north of Shanghai, since 1997.

Recently, in addition to increased domestic stainless steel demand in China, demand for coated steel sheets has also risen as Japanese appliance manufacturers and other IT and electronic appliance industries have advanced into the region. In consideration of this favorable business climate, Nisshin Steel and Hanwa have decided to increase their stake in Chang Fu Stainless Steel so as to enhance their stainless and coated steel distribution services to Shanghai and other locations in the east China region.

By purchasing other Japanese and Chinese stakeholders' shares in the joint venture, Hanwa's and Nisshin Steel's stake will become 58% and 40% respectively, with 2% held by the City of Taicang.

Chang Fu Stainless Steel processes stainless steel and coated steel with one large-scale leveler, one large-scale slitter, one mini-leveler, two sharing lines, and has an annual capacity of approximately 72,000 tons.

Although the joint venture forecasts 65,000 tons in work volume for fiscal 2002, it is carefully eyeing rising stainless steel demand in eastern China, which along with increased demand stemming from greater production at Taiwanese and other appliance and IT related manufacturers as well as new arrivals to the market should bring operations up to full capacity for fiscal 2003. Hence, Chang Fu Stainless Steel will install new equipment in fiscal 2003 and deems it necessary to consider new expansions to its work processes.

Chang Fu Stainless Steel was initially established as a center primarily for stainless steel sales of in China. However, even as Japanese products were burdened with antidumping litigation, the joint venture expanded its supply to appliance manufacturers and its material suppliers also grew to include not only Nisshin Steel, but also Ningbo Baoxin Stainless Steel Co., Ltd., yet another joint venture in which both Nisshin Steel and Hanwa hold stake. Hence, Chang Fu Stainless Steel's sales operations are now backed by inventory and processing functions as well.

Looking forward, Chang Fu Stainless Steel will increase its sales routes in the general demand sectors (construction, IT, appliances) for stainless steel and also plans to expand into the high-demand potential automotive sector.