JFE Container to Add New Drum Line in Zhejiang Plant

Japanese largest drum can maker, JFE Container announced on Monday the firm expands the production capacity from current annual 2.4 million units to 4.2 million units at Chinese subsidiary, JFE Steel Drum Zhejiang by October 2013. The firm adds No.2 production line for around US$ 15 million. JFE Container increases the total annual production capacity to 13 million units or world No.2 through a series of expansion at Chinese operations.

The firm increases the Chinese production capacity to 7.2 million units by October 2013. The capacity is much larger than 5.5 million units of Japanese production in fiscal 2010 ended March 2011. After the expansion, the firm’s production capacity exceeds the capacity of European major of Mauser group.

The firm invests total around US$ 26 million including working capital for the expansion. The firm expands the plant building by 2000 square meters to total 10,000 square meters. The state of the art production line can make around 29 units per man-hour compared with around 11 units of current line and around 20 units in Japanese operation. The firm tries to improve the productivity for better competitiveness and quality part of due to higher local labor cost.

JFE Container’s president Hirohisa Nakashima said at press conference on Monday the firm could build new plants in China. He said the firm would build new plant in Chongging and Yantai if the firm could secure annual 1 million units of order each from new plant of Chemical major, BASF Chongging and expanding Chinese chemical major, Yantai Wanhua group.

JFE Container expects drum demand increases to 34 million units in 2014 in eastern China from 23 million units in 2010. Chinese chemical industry expands ethylene output capacity aggressively but the local supply is still around 60% of local demand. JFE Containers decided the expansion when the firm expects Chinese ethylene and chemical products production increases more creating additional drum demand.