Formosa Plastics Group to Invest US$500 M. to Expand Steel Mill in Fujian, China
2014/07/28 | By Steve ChuangOptimistic about the growth potential of China's domestic market for steels, Formosa Plastics Group will invest US$500 million into expanding a steel complex in Fujian, southeastern China, which is owned by the group's affiliate Fujian Fuxin Special Steel Co., Ltd., says the company's chairman, C.T. Lee.
The steel complex costs some US$1.314 billion to construct in two phases, with the first to be completed in August, when its annual output will reach 120,000 tonnes of hot-rolled stainless steel coils coupled with 600,000 stainless steel coils that are hot-rolled, annealed and pickled. The complex's overall output can be raised to some 900,000 tonnes according to demand.
Advanced equipment from Germany's SMS-Siemag, Japan's Mitsubishi Hitachi Metals and Toshiba Mitsubishi Denki, and Austria's Andritz, as well as start-of-the-art vacuum refining furnaces will be installed in the complex, whose 400 series stainless steel will target local manufacturers of kitchenware, automotive and other high-end products. The complex will likely contribute RMB20 billion (US$3.33 billion) to Formosa Plastics Group's turnover a year after start-up.
The second-phase construction includes a capacity expansion to 1.44 million tonnes of hot-rolled sheet steels and coils, and the establishment of an advanced cold-rolling line, to boost the complex's overall production value to RMB40 billion (US$6.66 billion) upon completion.
Likely motivated by China's stronger-than-expected demand for stainless steels, Formosa Plastics Group has recently decided to invest an additional US$500 million to expand the complex with a cold-rolling stainless steel coil mill with annual output of 400,000 tonnes, to broaden product mix to better explore the local market.
To achieve profitability within the shortest time, Lee says that the complex will roll out 400 series stainless steel containing chromium, titanium and niobium, coupled with 300 series steels that contain nickel and chromium, to carve out niches and hedge against material price fluctuations. (SC)
| Formosa Plastics Group's Ongoing Investments in China | |||
| Project
| Planned Annual Output
| Investment Value
| Date of Start-up
|
| Expansion of a petrochemical plant in Ningbo
| 150,000 tonnes of PVC Additional output of 160,000 tonnes of AA, 200,000 tonnes of AE,72,000 tonnes of EVA and 60,000 tonnes of SAP
| US$750 M.
| By end of 2014
|
| A battery electrolyte plant in Ningbo
| 5,000 tonnes
| US$20.5 M.
| 2016
|
| A steel complex in Fujian (owned by Fujian Fuxin Special Steel)
| 120,000 tonnes of hot-rolled stainless steel coils and 600,000 tonnes of steel coils undergoing hot-rolling, annealing and pickleing (to be achieved after the first-phase construction is completed)
| US$1.314 Bn.
| August, 2014
|