JFE Container Establishes Drum Can Plant in China

JFE Container, Japanese major drum can maker announced on Friday the firm establishes a drum can manufacturing subsidiary, JFE Steel Drum Jiangsu (JSDJ) in Jiangsu, East China. This is JFE Container’s third plant in China. JFE Container’s production capacity reaches 10 million cans in China and Japan. The firm expects drum can demand increases by 10% per year in East China. Mr. Hirohisa Nakajima, JFE Container’s president said the firm eyes to increase productive lines and construction of additional plants in China.

JSDJ is established in April and starts the production in March 2012. In China, many chemical product makers are expected to increase the productions. JSDJ is scheduled to enter 2 shifts within a year after the production start. The capacity is about 1.8 million cans per year. The plant will purchase cold rolled sheet from Chinese steel makers such as Bao Steel. The annual revenue is targeted at 4.5 billion yen as of the full operation.

JSDJ will supply high quality drum cans to chemical products makers in Jiangsu. JFE Container forecast the demand for chemical products in China would expand to 23 million tonnes in 2011 and 27-28 million tonnes in 2013 from 17 million tonnes in 2008. On the other hand, China’s self sufficiency rate of ethylene is about 60% at present. Ethylene production will be expanded in a medium term.

JFE Container forecasts drum can demand in East China reaches 25 million cans in 2012 from 19 million cans in 2009. The growth rate is 2 million cans or 10% per year. The firm plans to bring up drum can production to 4.8 million cans in China and 5 million cans in Japan as of 2014.

JSDJ’s capital fund is US$ 10.13 million. JFE Container holds 80.1% shares with 19.9% shares held by Marubeni-Itochu Steel. JSDJ’s employee number will be about 120.