BEKAERT EXPANDS STEEL CORD PRODUCTION CAPACITY

Bekaert, worldwide producer of steel wire, steel wire products and steel cord and a fast-growing producer of Advanced Materials, has decided to expand its steel cord production capacity in China and to build a new steel cord plant in Central Europe.

CHINA

There is a fast-growing demand for steel cord for tyre reinforcement in China as a result of the increase in local tyre production and the growing trend for radial tyres reinforced with steel cord. Local demand of such type of steel cord is today estimated at between 40,000 and 45,000 tonnes, compared to less than 10,000 tonnes five years ago.

In order to meet this ever growing demand and to offer customers the best possible service, Bekaert has decided to increase its local production capacity from the present 24,000 tonnes per year to 32,000 tonnes a year in two years´ time.

The increase will be partly assured by China Bekaert Steel Cord Co. Ltd (CBSC) of Jiangyin, in which Bekaert holds 90% of the shares and the local Fasten Group the remaining 10%. CBSC was set up in 1995 with a capacity of 8,000 tonnes, this having already increased to over 20,000 tonnes a year.

The production capacity of Bekaert-Shenyang Steel Cord Co. Ltd, a joint-venture set up in 1998, in which Bekaert holds 80% of the shares, will also be increased from 2,500 tons to 4,500 tons a year.

Total capital expenditures for this expansion of steel cord production in China are approximately EUR 23 million.

CENTRAL EUROPE

Demand for steel cord as tyre reinforcement material is also growing rapidly in Eastern Europe. Nearly all leading global tyre producers have plants in this region. In order to meet customer demand as effectively as possible, Bekaert has decided to build a new steel cord factory in Central Europe. Production capacity is planned at 7,000 tonnes within three years, requiring an investment of around EUR 19 million. During this initial stage, the semi-finished product will be supplied from an existing European Bekaert plant. Negotiations on the final site are not yet finalised, but the plant will most likely be built in Slovakia.

Through this expansion Bekaert wants to provide an optimal service to its customers and position itself as worldwide leader for the production of high quality steel cord.