Establishment of a joint venture to operate a new hot-dip coating line will strengthen market position with OEMs in southwestern China.

The ThyssenKrupp Group is once again expanding its presence in the Chinese growth market: Under a new agreement, ThyssenKrupp Steel Europe will strengthen its market position in premium hot-dip coated sheet for the local automotive industry.

The company already has operations in the country via a joint venture with Chinese steel producer Angang Steel – TKAS Auto Steel Co. (Tagal). Now ThyssenKrupp Steel Europe is additionally acquiring an interest in an Angang group company which is currently building a hot-dip coating facility in the southwestern city of Chongqing. ThyssenKrupp Steel Europe will own 12.5% of this enterprise directly and 37.5% indirectly via Tagal.

“We believe the strong current demand from the Chinese auto sector for hot-dip coated steel sheet and the growth prospects in this segment offer clear opportunities and we therefore want to strengthen Tagal’s position in this market,” says Dr. Heribert Fischer, responsible for sales and innovation on the Executive Board of ThyssenKrupp Steel Europe. The contracts have been signed, and the closing is expected in the coming months.

This agreement will enable ThyssenKrupp to further strengthen its position as an important supplier to the fast-growing Chinese auto industry, in particular in the premium segment. In addition to high-quality steel sheet, ThyssenKrupp is increasingly also supplying modern chassis and powertrain components to OEMs in China and so systematically continuing its growth strategy. Other technologies in which ThyssenKrupp is experiencing strong growth and holds leading market positions in China include slewing bearings for wind turbines and elevators and escalators for buildings and infrastructure. The Group averages annual growth of around nine per cent in China and increased its sales to 2.5 billion euros in fiscal 2013/14.

Tagal was established in 2002 as a 50/50 joint venture with Angang Steel in the northeastern Chinese city of Dalian. It operates two hot-dip coating lines and currently employs around 320 people, producing high-quality hot-dip galvanized sheet for the automotive industry, mainly outer body panels. Tagal serves virtually all the big OEMs in China, many of them European carmakers, and has established a strong competitive position as a local supplier of premium flat steel.

Tagal already holds a good market position in northeastern China. In order to strengthen its presence in other regions, the new facility will be located in Chongqing in the southwest of China in direct proximity to the auto manufacturers based there. The hot-dip coating line is scheduled to go into operation later this year and will produce high-strength steel grades, dual-phase steels and hot-dip aluminized hot forming grades.

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