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Company News, 2001-05-21, 02:00 AM

Krupp Thyssen Stainless intensifies its globalization

Shanghai Krupp Stainless invests 170m US$ to expand production

Shanghai Krupp Stainless Co., Ltd. (SKS) - a joint venture founded in 1998 between ThyssenKrupp Steel Group member company Krupp Thyssen Stainless (60% interest) and Shanghai Pudong Iron & Steel (40% interest) of the Baosteel Group - has now resolved to commence the 2nd implementation phase of work on its stainless steel flat products plant. For Krupp Thyssen Stainless this means a further important step in strengthening its position as the world`s leading stainless steel producer and internationalizing company operations.

Krupp Thyssen Stainless`s activities in China are taking place against the background of an extremely attractive market environment, and the volume of business there for stainless steel flat products has risen to around 1.4m t/p.a., with continuingly strong growth rates. Although domestic production has risen too, 70 per cent of the demand for stainless steel flat products is still covered by imports, which means the best possible prospects for SKS in the future.

The result of the first implementation phase at the plant will go into operation in November this year, and the second phase with an investment volume of approximately 170m US$ for the installation of a second cold rolling facility and an annealing and pickling line will more than double production capacity to 166,000 t. According to an agreement with the Chinese partner the completion of the cold rolling capacity up to 268,000 t shall be accomplished by the end of the year 2005.

In the initial phase, the spectrum of cold rolled products will primarily comprise thin-gauge bright annealed sheet and strip, predominantly in chrome alloyed ferritic grades. These will then be complemented by conventional surface types and thicker gauges, predominantly in chrome/nickel alloyed austenitic grades. The 2nd implementation phase is scheduled for completion by spring 2004.

A total 1.4 billion US$ is being invested in the overall project - an integrated stainless steel plant for the production of stainless steel strip and sheet with an output capacity of 440,000 t, 268.000 t of which cold-rolled - which is scheduled for completion by late 2006. The project`s financing is being supported by the World Bank Group`s International Finance Corporation and by Kreditanstalt für Wiederaufbau.

Krupp Thyssen Stainless coordinates the international activities of the ThyssenKrupp Group`s Stainless business unit. Comprising Krupp Thyssen Nirosta GmbH, Kre-feld/Germany, Acciai Speciali Terni SpA, Terni/Italy, Mexinox S.A. de C.V., San Luis Potosi/Mexico, and Krupp VDM GmbH, Werdohl/Germany (producer of nickel base alloys at locations in Germany and the USA), the Stainless business unit employs a staff of over 12,000, and in the fiscal year 1999/2000 generated a turnover of approximately EUR 4.4 billion from total supplies of close on 2m t of stainless steel flat products (1.5m t of which cold rolled steel and strip), and 0.5m t of other special steel and alloy products. This makes Krupp Thyssen Stainless the world`s biggest supplier of stainless steel flat products.

Founded in 1913, Shanghai Pudong Iron & Steel boasts a production capacity for crude steel of 1.8m t and for finished products of 2m t, making it China`s largest producer of alloyed and stainless steel medium and heavy plate and one of the country`s biggest steel producers. Its staff of 12,000 at 10 production sites generates a turnover of 5.5 billion RMB (about 660m US$). Besides serving the Chinese market, the company also exports its products to the USA as well as to Canada, Japan, South Korea and South East Asia. Shanghai Pudong Iron & Steel is one of the Baosteel Group`s leading subsidiaries in the steel production sector. One of the most competitive steel producers in China, the company has a wealth of experience and expertise, and has taken an expansive market approach in the area of alloyed and stainless steel products.

The ThyssenKrupp Group has maintained close relations with China for more than 100 years, opening its first office in Peking as long ago as 1870. Baosteel has had close links with the ThyssenKrupp Group for many years in the area of technical consulting.

<b>For further information, please contact:</b>

Dr. Monica Soffritti
Krupp Thyssen Stainless GmbH
Phone: +49 203 52-4 51 85
Fax: +49 203 52-4 51 82

Manfred Söhnlein
Thyssen Krupp Steel AG
Phone: +49 203 52-2 56 90
Fax: +49 203 52-2 63 69

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