JFE Container to Double Drum Output Capacity in Zhejiang, China

JFE Container plans to double production capacity of JFE Steel Drum Zhejiang in China to 300,000-350,000 drums per month from current 150,000 drums. The expanded facilities would enter operation in early 2013. The firm projects capex for the expansion at 1-1.5 billion yen. Meanwhile, JFE Container examines new plant construction in Chongqing and Yantai, China. The firm’s third plant in China, JFE Steel Drum Jiangsu will complete the plant construction in May and start commercial production in March 2012 on schedule. JFE Container expects the group production capacity in China could exceed 5.59 million drums per month of Japanese plants in fiscal 2010.

The group’s sales volume in China totaled 2.646 million drums in 2010 including Zhejiang and Shanghai, increasing by 59% year-on-year. The monthly sales volume hit record high 265,000 drums in March. The profitability was also steady. Zhejiang and Shanghai marked record profits in March. JFE Steel Drum Zhejiang is expected to eliminate cumulative loss in August while JFE Steel Drum Shanghai in May.

JFE Container plans to double Zhejiang plant’s capacity and start the commercial operation in early 2013. Meanwhile, Zhejiang plant recently started commercial production of internal-coated drums on March 21 with initial capacity at 40,000 drums per month by double shifts.

JFE Container also eyes new plant construction when Chinese 2 major chemical makers plan new plant establishment in Yantai and Chongqing. The chemical makers’ plants are expected to start operation in 2014. JFE Container is progressing feasibility study for drum plant construction in Yantai and Chongqing to start operation in 2014.

JFE Container group’s production capacity is 1.2 million drums per year in Shanghai, 1.8 million drums per year in Zhejiang and 1.8 million drums per year in Jiangsu.