German-Chinese joint venture with investment volume of US$1.4 billion

Shanghai Krupp Stainless Co., Ltd. (SKS) begins production on November 2, 2001, entering the most dynamic stainless market in the world with a range of cold-rolled stainless steel products. German Chancellor Gerhard Schröder, visiting Shanghai as part of a state visit to China, will open the plant on November 2.

Dr. Ulrich Middelmann, vice chairman of the executive board of ThyssenKrupp AG and chairman of the executive board of ThyssenKrupp Steel AG, today told the press in Shanghai: "Shanghai Krupp Stainless is not just a new steel plant. It is a symbol of the speed of economic and industrial development in China."

SKS began life in April 1998 on the basis of a joint venture agreement signed in late 1997 by Krupp Thyssen Stainless GmbH (KTS) and Shanghai Pudong Iron & Steel Co., Ltd. (SPS). Phase one of the joint venture project is a 72,000 tpy cold rolling mill that has been built in the south of the Shanghai district of Pudong and will employ 359 people. The two shareholders are ThyssenKrupp subsidiary KTS, Duisburg, the world`s oldest and biggest stainless flat-rolled producer, with a 60% stake, and SPS, part of the Shanghai Baosteel group and one of China`s major specialty steel manufacturers (40%).

Middelmann: "A joint venture like Shanghai Krupp Stainless was long regarded as utopian. It is still groundbreaking today. It has opened the door for further political and economic cooperation. We can therefore be proud that we are one of the first to be given this opportunity." According to Middelmann Shanghai Krupp Stainless Co. Ltd. is ThyssenKrupp`s biggest joint venture in Asia to date.

The total investment volume of Phase 1 (including working capital) is around US$ 295 million and is being financed apart from the two shareholders KTS and SPS by the International Finance Corporation (IFC), a member of the World Bank Group, partly provided through participations of international commercial banks, and the German export financing bank Kreditanstalt für Wiederaufbau (KfW).

The new facilities being put into operation are state of the art, as is the environmental protection technology being used, which meets the exacting requirements of Chinese and German standards as well as the strict conditions imposed by the World Bank.

With their light gauges and bright finishes the products are directed at the top end of the market. The Chinese market - at approx. 1.5 million tons almost as big as the US market - is growing at a fast rate and is currently the most dynamic in the world. As China currently imports over 70% of its stainless flat-rolled requirements, SKS has outstanding prospects of success.

ThyssenKrupp and Baosteel have reinforced their determination to bring the project in its entire scope to a success and to complete the cold rolling mill 1 year earlier than originally scheduled . Preparations are under way for the second stage of construction. The first part incorporating a second cold-rolling mill and an annealing and pickling line is scheduled to go into operation by autumn of 2004, adding 94,500 tons to the plant`s annual capacity. The final part of the cold-rolling mill will increase the capacity to 268,000 tons per year by the end of 2005 according to the new schedule. In the framework of the total approved investment of US$ 1.4 billion, the establishment of the integrated stainless steel plant Shanghai Krupp Stainless shall finally be completed by the end of 2006.

Contact:
Klaus Pepperhoff
ThyssenKrupp AG
Zentralbereich Kommunikation / Presse
August-Thyssen-Straße 1
40211 Düsseldorf
Phone: + 49 211 824-36007
Fax: + 49 211 824-36041
E-Mail: presse@tk.thyssenkrupp.com