euro adhoc: RHI AG
Joint Ventures/Cooperation/Collaboration
RHI signs magnesia raw materials joint venture in China

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RHI Refractories operates two plants producing refractories in the Liaoning province in China. Currently, their total annual capacity is being extended is being extended, and the third plant will be commissioned at mid-year. The main raw material for refractories production is magnesite, and 20% of the world’s deposits of this mineral are located in the Liaoning province. Before being used as a refractory raw material, the mineral is processed into magnesia of different qualities in a multi-level treatment and firing process. RHI currently covers 50% of its basic raw material requirements from its own mining and raw materials plants in Austria, Italy and Turkey. RHI’s Chinese plants today cover their needs for high-grade magnesia exclusively from Chinese suppliers.    To secure the supply of raw materials for the Chinese RHI plants in Bayuquan and Dalian in the long term, RHI will establish a joint venture for the production of top-quality magnesia together with its Chinese partner Liaoning Jinding Magnesite Group Co. Ltd. (JDMG). Construction is scheduled to begin in mid 2006 once all approvals have been obtained. Production will be launched in mid 2007 with the first production line, and in 2008 from the second line. 500 people will be employed when both lines are in operation.  RHI will hold an 80% share in the newly established company, its partner JDMG will hold 20%. JDMG owns two high-grade magnesite mines in the Liaoning Province and will ensure the long-term local supply of raw materials to the joint venture. In addition, JDMG, like RHI; operates two magnesia plants itself; both partners provide their know-how and financing for the new company relative to their shares.  The investment in the two production lines which will cover the raw material demand of the Chineese RHI plants by more than 50% amounts to EUR 35 million; the total financing requirements for RHI come to nearly EUR 40 million. Sustainable investments in the strategic supply of top-quality magnesia for the Chinese plants and other RHI facilities in Europe and North America reduce RHI’s dependence on suppliers on the world market significantly.  In addition to ensuring the continuously high quality of raw materials, which is indispensable for the production of cutting-edge refractory products by RHI Refractories, the joint venture also achieves an important economic optimization. RHI Refractories can optimally employ its technological leadership in producing refractory raw materials at a logistically optimal location in the immediate vicinity of raw material sources and its own plants. This will lead to an improvement in RHI’s earnings quality based on a deeper backward integration.

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ots Originaltext: RHI AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Investor Relations
Dkfm. Markus Richter
Tel: +43-1-50213-6123
Email: markus.richter@rhi-ag.com

Branche: Refractories
ISIN:      AT0000676903
WKN:        874182
Index:    ATX Prime
Börsen:  Wiener Börse AG / official dealing

Weitere Meldungen: RHI AG

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