JFE Container Eyes Potential New Chinese Drum Plants

JFE Container tries to expand production at Chinese operations. The Chinese third plant of JFE Steel Drum Jiangsu starts full scale production in early 2012 after the firm gets approval for containers of hazardous materials transport by end 2011. The second plant of JFE Steel Drum Zhejiang discusses plan to expand the monthly production capacity from around 150,000 units to 300,000-350,000 units. JFE Container’s president Hirohisa Nakashima indicated on Tuesday the firm is under study for potential new plants in Yantai and Chongging.

JFE Container estimates the total drum shipment in eastern China, where the 3 plants cover mainly, increased to 20 million units in 2010 from 19 million units in 2009 and around 8 million units in 2004. The firm expects the demand should increase more in 2011 while the demand is now slow. The firm eyes additional expansion when Chinese chemical major, Yantai Wanhua group plans new plant in Yantai and BASF of Germany plans new plant in Chongging.

JFE Container held opening ceremony of the subsidiary, JFE Steel Drum Jiangsu in Yangzhou on Tuesday. The plant tries to increase the operation level as early as possible. The plant covers Shanghai Chemical Industry Park with major chemical plants along with activity of existing 2 plants of JFE Container.

Mr. Nakashima said the third plant with best quality and environmental facilities should provide better operation with better quality, delivery and service. Marubeni-Itochu Steel’s Kenichiro Ushino mentioned 10 years experience in Chinese market since the first plant was established. JFE Steel’s vice president Mitsugu Aikawa said the firm expects JFE Container grows through high quality drum supply.

JFE Container controls 80.1% of JFE Steel Drum Jiangsu with 19.9% share by Marubeni-Itochu Steel. The plant would make annual 1.8 million units when the operation reaches normal level. JFE Container’s Chinese production reaches near 5 million units with the new plant while the firm’s production was 5.6 million units in Japan in fiscal 2010 ended March 2011.