Marubeni-Itochu Steel to Launch Sheet Pile Lease JV in China

Marubeni-Itochu Steel and Marubeni Construction Material Lease announced on Friday they agreed with China Railway Materials Commercial to establish joint venture for leasing temporary construction materials including sheet pile in Shanghai in December. The temporary materials leasing business in China is first attempt by Japanese company. Marubeni-Itochu Steed and Marubeni Construction Material Lease try to expand the business into China by offering sheet pile using knowhow appealing shorter work period and environmental friendly nature when China expands infrastructure investment for high speed railway and port facilities.

The new company will provide sheet pile and other soil retaining materials including H-beam. The company procures the materials mainly from Japan along with local companies. China Railway Materials Commercial has 40% share in the new company with 50 million yuan of capital with 27% share by the branch company in Beijing. Marubeni-Itochu Steel has 25% share, Marubeni Construction Material Lease has 5% and Marubeni-Itochu Steel’s Hong Kong subsidiary has 3%.

China Railway Materials Commercial, which is former Materials Administration Bureau under the Ministry of Railway, is major state owned company under State-owned Assets Supervision & Administration Commission of State Council. The company procured around 18 million tonnes of steel products for rail construction and other materials for Ministry of Railways in 2009. The company tries to improve the operation by utilizing Marubeni Construction Material Lease’s knowhow on leasing and sheet pile using method in order to meet the growing demand.

China plans to construct 26,000 kilometers of railway including 9,000 km of high speed railway by 2012 while the government plans other many infrastructure investment projects for river and water and sewerage development. Chinese sheet pile import will increase to more than 500,000 tonnes in 2020 from estimated 180,000 tonnes including around 100,000 tonnes from Japan in 2010.

Marubeni-Itochu Steel tries to expand the offshore business especially in emerging countries. The firm participated in Nippon Steel led steel pipe pile making project in Vietnam. Marubeni-Itochu Steel seeks growth through offshore business when Japanese construction demand is expected to decrease more.