950821

Kobe Steel to

form joint

venture in China

TOKYO: Kobe Steel Ltd said it will form a joint venture in China with Yiyang Rubber Machinery Co Ltd of China to make and market tyre curing presses.

The new firm, Yiyang Yi Shen Rubber Machinery Co Ltd, will be established on September 10 in Yiyang, Hunan Province, Kobe Steel said in a statement.

The venture, capitalised at 200 million yen, will be the first joint venture in China to produce tyre-making machinery, Kobe Steel said. A tyre curing press is one of the core machines needed to make tyres, it said.

Yiyang Rubber Machinery, which is China's second largest rubber processing machinery maker, will hold 65 percent of the venture and the Kobe Steel group will hold the rest, Kobe Steel said.

The 35 percent will be divided between Kobe Steel with 19.5 percent and trading firm Shinsho Corp with 15.5 percent, Kobe Steel said. Shinsho is 43.0 percent owned by Kobe Steel.

Production is expected to begin in October this year, Kobe Steel said.

The venture will make and sell mechanical and hydraulic tyre curing presses based on Kobe Steel's design and production technology, Kobe Steel said.

The venture will also sell Kobe Steel's extruders and finishing machines used in the manufacture of tyres, it said.

Sales are forecast to be 40 million yen in the financial year to December 31, Kobe Steel said. It expects sales of 300 million yen in 1996.

By the year 2000 the venture is forecast to achieve annual sales of one billion yen, Kobe Steel said.

China's tyre production is expected to grow tremendously by the year 2000 due to increasing use of motor transport and to the rising use of radial tyres favoured on the growing network of highways. Despite the rising tyre demand, China has since 1985 banned importation of tyre curing presses under a national policy to boost domestic production of such presses.

The joint venture partners hope the new company will also supply tyre curing presses to Thailand, Indonesia, Malaysia and other Asian countries in the future.-Reuter