Project No.35

    1. Project Name 
    A 0.6 million tons per year short stream production line with new 
electrical steel-making, refining, slab casting and plate mill revamping project. 
Qinhuangdao Chengang Metallurgical Group Co.,ltd.

    2.Project Content
    The products of this project can take the place of imported high quality 
special middle plate, The production sizes are as 
follows(150-250)*(1200-1600)*(2100-2800)mm 
(slab);(6-60)*(1500-3000)*(~12000) mm (plate) .This project plans to produce 
high quality plate using advanced technology ¨Cshort stream process of UHP 
electrical steel-making ¨Crefining ¨Ccontinuous slab casting-plane mill. The key 
equipment:1 one set off 100t 72 MVA UHP (AC)electric furnace with scrap 
preheating unit. 2.one set of 100t 16 MVA LF furnace (one set of 100 tvacuum 
degassing refining furnace ,built in future)3.one set of 10.3m slab continuous 
caster 4.one set of 3500two stand four-high mill. The auxiliary facilities include 
fuel and gas cleaning system, water supply and treatment system, oxygen 
generation station, air compressing station ,boiler house, light oil station and 
220KV substation, etc. The total investment is USD 130.97 million, among 
which the estimated investment of slab procution system is USD 100.97 
million, and that of revamping on plate system is USD 30 million.78.58 million 
are  expected to be foreign investment by cash or equipment, Chinese side 
will invest in the form of land, infrastructure and cash.

    3.Necessity of the Project
    Qinhuangdao Plate Steel Co., ltd spends RMB 55 million yuan (USD 
6.627 million)every year on purchasing slab outside, the steel grade, quality 
and size of the slab are limited by purchasing .In order to solve this problem 
and utilize the advantage of modern rolling equipment ,the production line with 
short stream process-electrical steel-making  refining ¨Ccontinuous slab 
casting-plate mill is planned to be built. This project will optimize the product 
mix of the company and make full use of the existing equipment. It is 
necessary to improve the products quality and economic benefit of the 
company.

    4.Market Analysis
    The short stream steel-making process with EAF will be continuously 
developed in China in early next century .It is also an important technical 
developing project in metallurgical industry during the 9th Five-year Plan. In 
1996 ,the EAF steel in China was 20% of the total  and will reach 27% or 
more in the year 2000.The production capacity of EAF steel should achieve 
32.4% million tons among the total of 0.12%  billion tons. There are about 
1620 sets of furnaces with an average heat capacity of 5.4 tons. Over 95% of 
them are low powered electric furnaces without secondary refining 
facilities .The main existing problems of Chinese EAF steel-making are large 
amount of furnaces, small volume, low efficiency, high power consumption, 
poor quality and high cost. So it is more important to upgrade the process and 
equipment while adjusting the product mix in addition to filling the supply gap 
of QAF steel.

    5.Economic Analysis
    Economic indices are estimated as follows, when the production reaches 
the designed capacity: Annual sales income will be USD 162.65 million, the 
Investment profit rate will be  9.37%,the Investment profit rate after tax will be 
13.15%,the Pay-back period will be 8.21 years (excluding plate revamp 
system)

    6.Enterprise Presentation
    Qinhuangdao Chengang Metallurgical Group Co.,ltd. is a state-owned 
enterprise with USD 21.69% million registered capital .Four branch 
companies and one steel rolling company-Qinhuangdao Plate Steel 
Co.,Ltd .are under its jurisdiction. Qinhuangdao Plate Steel  Co.,Ltd can 
produce plate of 550,00 tons ,its profit  level is in the leading position around 
the country in plate production field. The company has a product test and 
measurement center which is certified by provincial CMA .The products' 
quality of the company is qualified to ISO 9002."Qinban"brand plate has a 
good reputation at home and abroad. 40% of the products are exported .The 
annual sales revenue is about USD over 120 million. The net fixed assets are 
USD 60 million.

    7.Investment Environment
    Qinhuangdao is one of the earliest opening cities to the world. It is 
located in passage-way from Northeast to North China, within Bohai economic 
zone. It enjoys good climate and beautiful landscape. This region is rich in 
natural resources, good terrain and landforms with 25-35 ton per square 
meter of ground  loadcarrying capacity, suitable for building large scale 
projects. Beijing-Harbin, Beijing-Qinhuangdao, Datong-Qinhuangdao join here. 
Highway ,airline and telecommunications are highly developed. Qinhuangdao 
Port is one of the large east port in China, and can be used all year around 
Sufficient materials can meet the demand of this project.

    8. Forms of Cooperation
    Cooperation, Joint venture

    9.Project situation
    The project proposal ,feasibility study report and encironment influence 
evaluation report has been approved by the experts of Qinhuangdao City and 
Hebei province.

    10.Person to Cntact
    Ma He guo, Wu Yu,Li Yan Hua
    Address: 4th floor Gold Administration Building Gangcheng Street , 
Haigang District
    Qinhuangdao city Hebei Province P.R. China
    Tel: 0086-335-3087654
    Fax: 0086-335-3087654
    E-mail:Lixueq@263.net