Kennametal Breaks Ground in China for New Manufacturing Facility

Kennametal Inc. have announced that it broke ground on Tuesday, March 15 for the firm's new Chinese manufacturing plant. Located in the Tianjin Economic Development Area (TEDA), the facility, initially sized at 15,000 square meters, will employ some 200 people in manufacturing, and advanced engineering and design activities. This facility could grow to 35,000 square meters and employment could reach 400 people. Estimated investment in this new plant will be between 30 to 40 million USD, which is in addition to the approximately $35 million US that Kennametal has already invested in its China business.

Kennametal, a global company headquartered in western Pennsylvania in the USA, began operations in China in 1991 via a wholly owned foreign Beijing company now named the Kennametal Xuzhou Co. Ltd. In the ensuing fourteen years, Kennametal has established Kennametal Ltd., a manufacturing plant in Jinqiao Export Processing Zone in Pudong, Shanghai, and completed the purchase of what is now Kennametal Hardpoint Inc. It is from this center that Kennametal offers world-class products, engineering, design services and training activities to a broad customer base in China.

"We are accelerating our growth in China in order to more effectively serve this rapidly developing market as well as to support our global customers in China," said Markos Tambakeras, Kennametal chairman, president, and chief executive officer. Our TEDA plant will support the growth inside China producing our latest products utilizing state of the art equipment, advance engineering and design. We are also very appreciative of the guidance, support and professionalism of the TEDA organization and other senior government officials. This plant will form the corner stone of our ambition to become the undisputed market leader in China by the end of this decade.

"The size and importance of this rapidly expanding market demands that we enhance our presence," added Kennametal Executive Vice President and Chief Operating Officer Carlos Cardoso. "Our global and local customers expect us to be there with them, and to serve their needs with world class products and services. Our presence promotes customer intimacy, shorter lead times, global quality/local availability, and positions Kennametal well to succeed in this market."

Currently Kennametal annual sales in China top $50 million US, with more than 400 employees serving customers in many market segments, including automotive, aerospace, heavy industry, electronics, and mining and construction. Plans for the design and construction of the new TEDA facility are underway, and Kennametal expects to begin serving customers from the new plant my mid-2006.

http://www.kennametal.com

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