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					18. Cooperation Project of Newly Built Stainless Steel Slab Production Line

                                       in Benxi

Ⅰ.Overview of the project
1. Necessity of Project Construction
In recent years, China has become one of the countries with the fastest growth of output and
the largest amount of both consumption and import of stainless steel. But the per capita
consumption of stainless steel goes lower than the average level in the world. It is estimated
that the consumption of stainless steel in 2010 will climb up to over 10 million tons in China
including more than 65 percent of sheet steel. From the point of stainless steel production
capacity released by present projects under construction and future projects planned to be
established, hardly can the needs of domestic market be satisfied. Especially, the big gap
between the supply and the need of rolling stainless steel occurs which provides a good
chance for further market expansion and production development.
2. Main Content and Total Investment
Set up a joint venture of stainless steel production line at the present factory site without land
acquisition. Meanwhile, taking the advantage of the public auxiliary facilities existed can cut
off investment in an effective way. The output of main products is 600,000 tons per year,
including 300,000 tons of hot-rolling pickled stainless steel slab and 300,000 tons of
cold-rolling stainless steel slab (subject to change on the basis of the market need).
The estimate of total investment varies from 3000 to 4000 million Yuan RMB.
3.   Economic Profit Analysis after Project Completion and Market Prospect Forecast
It is expected that the market prospects will be good and profits of more than 500 million
Yuan RMB can be yielded each year after project completion.
4. Joint Venture and Cooperation Mode:
Benxi Iron and Steel (Group) Co. Ltd. will invest in the project together with the cooperation
partner.
5.   Geographical Position, Transportation and Communication
The project is built within the area of present factory site of Benxi Iron and Steel (Group) Co.
Ltd. which can make good use of geographic position. Benxi Iron and Steel (Group) Co. Ltd.
is located in Benxi City standing at the east part of Liaoning Province of China. The city is 63
kilometres southeast of Shenyang, capital of Liaoning Province, and is furnished with
convenient connections through railway, highway and air traffic.
6. Investment Condition and Proportion Offered by Two Parties
Benxi Iron and Steel (Group) Co. Ltd. will invest in the project together with the cooperation
partner to establish the stainless steel slab production line. The estimate of total investment
varies from 3000 to 4000 million Yuan RMB with registered capital about 1200 to RMB 1600
million Yuan.
Registered capital consists of the investment financed by Benxi Iron and Steel (Group) Co.
Ltd. and cooperation partner. Benxi Iron and Steel (Group) Co. Ltd. will perform equity
participation by means of land and cash accounting for 75 to 50 percent of registered capital.
The cooperation partner will perform equity participation by means of cash, technology and
equipment accounting for 25 to 50 percent of registered capital.
The funding required for the project implementation excluding registered capital will be
financed through loan borrowed by the joint venture. Benxi Iron and Steel (Group) Co. Ltd.
and the cooperation partner guarantee that the joint venture is under an obligation to repay the
loan borrowed according to the investment proportion of registered capital on each part.
7. Technology and Equipment to Be Imported
8. Project Progress of Preliminary Work
Preparations for the project construction are underway.
9. Construction Period and Investment Recovery Period
Construction is supposed to commence in March 2008 and the production line will be put into
operation in December 2009. Investment payoff period is 7 years.
Ⅱ. General Information of Chinese Undertaker
1. Enterprise Name: Benxi Iron and Steel (Group) Co. Ltd.
2. Enterprise Nature: Sole state-owned enterprise
3. Date of Establishment: Benxi Iron and Steel (Group) Co. Ltd. was set up in 1905 which
can be honoured as one of the oldest iron and steel companies with the longest history in
China. In July 1996, the company was restructured to a large sole state-owned iron and steel
integrated enterprise, Benxi Iron and Steel (Group) Co. Ltd., after the approval by the state.
4. Plant Area: 7.5 square kilometres (excluding ore mines)
5. Staff Number: 64211
6. Technical Strength: 10372 technicians
7. Business Scope: Manufacture and sale of metallurgical products
8. Legal Representative:
9. Total assets and registered capital: Benxi Iron and Steel (Group) Co. Ltd. owns total
assets of 40.1 billion Yuan RMB and registered capital of 5.4 billion Yuan RMB
10. Annual Sales Income and Market Share of Main Products Available: In 2006, sales
revenue of dominant products in Benxi Iron and Steel (Group) Co. Ltd. reached 32 billion
Yuan RMB. Hot-rolling coils of the company have been the domestic market leader with the
biggest market share.
Ⅲ. Contact Method
Project Undertaker: Benxi Iron and Steel (Group) Co. Ltd.
Address: No.16 Renmin Road Benxi, Liaoning
Post Code: 117000
Contact Person: Ma Haibin
Tel: 0414-7828509
Fax: 0414-2842074
E-mail: MHB@BXSTEEL.COM

				
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posted:11/23/2011
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