JFE Container Eyes to Build 4thChina Drum Plant

JFE Container studies to build fourth steel drum making plant in China eyeing Chongqing, Guangzhou, Yantai and Dalian. The production and sales was record level at existing 2 plants in China in September. The third plant of JFE Steel Drum Jiangsu starts operation as early as in August 2011 when the construction will complete in March-April 2011 while the piling already completed.

JFE Container studies potential new plant in Chongqing when German chemical major, BASF plans new plant waiting approval from the authority and needs drum supplier. JFE Container tries to find the feasibility for the new plant. BASF’s plant takes around 3 years to start operation while JFE Container expects new drum plant could start operation in one and half years.

JFE Container also studies potential new plant site when grease demand increases to serve expanding automobile output in Guangzhou, Chinese chemical makers plan to expand operation in Yantai and Major chemical industrial park is planned in Dalian. The firm tries to check the profitability to decide the new site.

The existing 2 plants in China renewed record production and sales volume in September. The sales volume increased to 115,396 units Shanghai plant, which was 1,958 units higher than former record in January 2008 and increased to 135,171 units at Zhejiang plant, which was 3,591 units higher than former record in August 2010. The plant in Zhejiang keeps full capacity operation since December 2009 when the plant increased the shift. The profit also hit record at the plants. The plant in Zhejiang launches internal coating product with electrostatic coating process in March 2011 to meet growing demand for high valued product.

JFE Container plans to increase the shipment by around 4% to 5.4 million units in Japan and by 56% to 2.6 million units in China in fiscal 2010 ending March 2011 from fiscal 2009. The sales weight in China increases to 33% in the year from around 24% in fiscal 2009 and reaches near 50% after new plant in Jiangsu starts the commercial operation.