Jun 4 2007
The SGL Group – The Carbon Company – has just signed a joint venture contract with the Chinese graphite producer, Shanxi Quanhai Graphite Co. Ltd. in Shanxi/Central China, for the production of specialty graphite in China. The agreement is pending requiring final approval by the appropriate government bodies in China.
The SGL Group will have 75% ownership of the joint venture. The aim of this strategic joint venture is to strengthen further the production base and market presence for specialty graphite in the Advanced Materials division of the SGL Group in Asia. The joint venture will considerably increase SGL Group’s specialty graphite material production capacity, in order to supply the rapidly growing demand in industry sectors such as semi-conductors and solar technology.
In addition, the SGL Group has released further planned investment projects in China. The capacities of the existing Shanghai machine shop can now be extended as a facility for purifying specialty graphite for the semi-conductor and other related industries. The extension of the machine shop in Shanghai in conjunction with the reverse integration by the new joint venture in Shanxi is an important strategic step to satisfy the growing demand of regional customers.
The foundation of the joint venture strategically supports the increase in production of isostatic graphite by the SGL Group from 3,000 to 5,000 metric tons. Following implementation of further site optimization in Morganton, USA, the SGL Group is in a position to supply up to 18,000 metric tons of extruded and pressed special graphite for growing market demand particularly in nuclear technology and armoring.
The development of the new joint venture in China is a further step of the SGL Group’s Asian strategy which remains the main focus of the Company.
The decision of the SGL Group to establish a joint venture with the Shanxi Quanhai Graphite Co. Ltd. is aligned with the strategic vision of the Chinese government of “promotion of the central region in China”. Above all, this is being supported by the government with relevant assistance and improvement of the investment environment in the Shanxi province.