28 October 2004 Bekaert confirms confidence in Chinese market
Expansion of the Shenyang production plant
Today, Bekaert officially celebrated the expansion of its steel cord plant, Bekaert-Shenyang Steel Cord Co., Ltd., in the presence of Mr. Li Jia, Vice-Governor of Liaoning Province, and Mr. Chen Zhenggao, Mayor of Shenyang.
Bekaert began production of steel cord for reinforcing radial tyres in Shenyang (Liaoning Province) in mid-1998. In line with the decision taken in May 2003 to significantly increase its production capacity in China, Bekaert doubled the capacity in Shenyang in less than one year, with the installation of the technologically most performing and most environment-friendly production lines.
The factory has grown into a fully-fledged production plant that produces a wide range of finished steel cord products, based on wire rod as the raw material. From now on, along with China Bekaert Steel Cord Cy, in Jiangyin (Jiangsu Province), which is the largest Bekaert steel cord plant in the world, it will be integrated in the global production platform from which Bekaert will supply its customers in a highly efficient way around the world. In Jiangyin, Bekaert also has a technology centre, where targeted product development is carried out in close partnership with its customers.
Bekaert aims to supply its customers with top-quality advanced wire products, which comply with the most stringent norms and it demands the same norms regarding its supplies of raw materials. Therefore, Bekaert is also working closely with several Chinese wire rod suppliers.
Bekaert notices that China which is experiencing rapidly-growing transport needs, is heavily investing in infrastructure and the company intends to maintain its position as market leader in steel cord products to reinforce tyres for trucks, as well as for passengers cars.
The Chinese authorities have set themselves the objective of bringing the logistical cost of infrastructure into line with that in Europe and North America. For this reason they have taken very strict measures to combat the overloading of trucks on the roads and they want to get in the very best means of transport, both as far as protecting the infrastructure and encouraging energy efficiency are concerned. In addition, the Chinese authorities are making great efforts to make consumers aware of these issues, which, in the longer term, will lead, as it did in other parts of the world, to an increase in the radialisation degree, i.e. the rate at which consumers switch over from using bias-ply tyres to (steel cord reinforced) radial tyres.
This is why Bekaert is continuing its ambitious investment plan in China. Construction at the third steel cord plant in Weihai (Shandong Province), where there are many important tyre manufacturers, and new players are entering the market as well, is in full swing.
Bekaert will also start production of other highly technological products in Shenyang. In order to respond to the customers' needs, a production line for fine cord for reinforcing belts is being installed now in Shenyang, in addition to the existing ones in Waregem (Belgium).
With its plants in Jiangyin and Shanghai, Bekaert is striving for accelerated growth in specific market segments for its other advanced wire products.
Earlier this autumn, Bekaert opened a production unit in Suzhou (Jiangsu Province) for advanced coatings. Bekaert is also setting up a service centre in China for various advanced materials and coatings with a view to further improving its services to local customers.
During the ceremony in Shenyang, Julien De Wilde, Chief Executive Officer, stated: “Bekaert has absolute confidence in the Chinese market, which constitutes an increasing part of the world economy. With our sixteen hundred Chinese employees, we are well placed to expand our market and technological leadership still further, in constructive cooperation with our customers and suppliers, and, in so doing, to achieve sustainable profitable growth.”