FerroChina to increase galv exports despite shortages at home

Singapore 15 November 2006 06:33

Privately-owned galvanized steelmaker FerroChina is planning to boost exports

next year despite a continuing shortage of galvanized steel in China.

FerroChina, a 900,000 tpy producer based in Changshu city in eastern Jiangsu

province, wants to increase exports so they account for 40-60 percent of total

revenue in 2007, company cfo Nelson Fong said at a press conference in

Singapore, where FerroChina is listed..

Exports provided 39.1 percent of the company?s revenue in the first nine months of

2006, up from just 1.5 percent in the same period last year.

There is more profit to be made in the export market, which has encouraged

FerroChina to increase overseas sales despite China?s status as a net importer of

galvanized products, the company said.

Chinese demand is likely to be 15.6 million tonnes this year, compared with supply

of just 12.7 million tonnes. The deficit will gradually narrow for the rest of the

decade with demand set to reach 21.3 million tonnes and supply 20.8 million

tonnes in 2010, FerroChina predicted.

The continuing deficit, combined with good overseas demand, means FerroChina is

confident about its future development, Fong said.

The company plans to increase capacity to 1.5-1.6 million tpy in 2007 and 2.4

million tpy in 2008 through expanding operations at two cold rolling mills and

boosting capacity at Changshu Everbright Material, a thin gauge galvanized

steelmaker in which it holds a 35.5 percent stake.

It also plans to complete an upgrade of its 300,000 tpy No.1 galvanizing line in

December and run the line at full capacity from March (MB Jul 27). The company

has been operating the line at 50 percent capacity since June.

The company posted a strong rise in profit in the third quarter due to the growth in

exports and good international prices, it said.

Net profit rose 33.8 percent year-on-year to 54.3 million yuan ($6.9 million), while

revenue hit 906.7 million yuan, up from 596.5 million yuan a year earlier.

Net profit more than doubled in the first nine months of the year to 213.8 million

yuan from 99.1 million yuan, while revenue rose 79.3 percent to 2.6 billion yuan.

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