Favorable Climatic, Geographic and Human Conditions

- Review with General Manager Fumio Sodu of Guangzhou JFE Steel Sheet Co., Ltd.

JFE Steel Corporation is composed of former NKK and Kawasaki Steel Corporation, which owns two production bases in the east and west of Japan. It masters the most advanced technologies to produce external auto sheets and various kinds of steel products that meet the need of environmental protection. Its annual crude steel output is 30 million tons, ranking front among world iron and steel enterprises. It is a global Fortune 500 enterprise.


Guangzhou JFE Steel Sheet Co., Ltd. is a joint venture of Guangzhou Iron and Steel Enterprise Group Ltd. and JFE Steel Corporation, and formally set up in October, 2003. The phase-I investment is about $200 million and one 400,0000t hot dip galvanized sheets production line was built. The phase-I project was put into operation in early 2006. It mainly produces auto steel sheet with a thickness of 0.3~2.3mm and a width of 800~1700mm.


General Manager Fumio Sodu of Guangzhou JFE Steel Sheet Co., Ltd. received the interview made by Guangzhou Municipal Board for International Investment and shared successful investment experiences in Guangzhou with us. Following are partial abstracts for readers.

(J: Fumio Sodu; I: Guangzhou Municipal Board for International Investment)


I: What key factors make JFE set up the plant at Guangzhou


J: For JFE, Guangzhou is an ideal investment city. It is because Guangzhou has huge market volume, and auto production bases and surrounding associated facilities are relatively concentrated. That is the so-called geographic condition from the Chinese old saying “favorable climatic, geographic and human conditions”; we grasped the fine opportunities when the 3 Japanese giants - Nissan, Honda and Toyota operate at Guangzhou, this is so-called climatic condition; our cooperation with Guangzhou Iron and Steel Group is very pleasant and smooth, this is so-called human condition.


We have enjoyed a very smooth and fine cooperation with Guangzhou Iron and Steel Group. That is because JFE owns advantageous technologies while Guangzhou Iron and Steel Group has governmental support. Although cooperation underwent a adapting period of time at the beginning, the whole process is relatively smooth.


I: As compared with other Chinese cities, what are the superiorities in operating an enterprise at Guangzhou


J: During our investment process, government played a very important and positive role and gave us many supports. E.g., they provided “7 supplies and one leveling” in the construction and facilitated us on road, power and water supplies. Of course, all those constructions of infrastructure facilities are not only for JFE, but also for better planning of Nansha’s development. Moreover, at the nearby Longxuedao terminal, government arranges JFE’s materials and equipments in priority, thus lowering our materials transportation cost. During transport from the harbor to our plant, we can enjoy fine roads and bridges. Customs clearance is very quick, so it further saves our various costs.


During JFE operation, government has attached great importance to us and played very favorable role in all aspects. Guangzhou Iron and Steel Group is a very excellent cooperation partner. We have established close relations with client enterprises like Guangzhou Honda, so it makes our production closely link with market demand.


I: What is JFE’s future development target at Guangzhou How do you treat JFE’s future opportunities at Guangzhou?


J: Now, JFE’s annual production capacity has reached 400,000t galvanized sheet and 1.8 million tons of cold rolled products. We have 200 employees, among which 11 are Japanese. We have a long-term enterprise development plan and wish to reach an annual production capacity of 5 million tons, and on the basis of Nansha project, it will have a strong radiant effect in a broad area.


Today, iron and steel demand accounts for half of China’s industrial need. It needs  70 million tons in a year. We are quite optimistic about China’s market capacity. That is why it should avoid surplus output in government’s future industrial planning and make an early trade restructuring. That is what our foreign-funded iron and steel enterprise wishes to see.


On enterprise’s routine operation and management, Chinese and Japanese cultures are not quite the same. Both of us must learn how to understand, communicate and coordinate. Carefulness and strictness of Japanese enterprises on management is something to learn for China.


I: Would you like to talk about your integral impression on Guangzhou city


J: In general, we have a very good impression on Guangzhou, which presents in the following 3 aspects: first, good eating. Guangzhou enjoys a long historic catering culture and tradition while Yue cousin flavor is relatively close to Japanese tastes; second, enjoyable climate, suitable for living; third, as compared with the past, Guangzhou’s environment and air have become more beautiful and cleaner. We are quite satisfied and full of confidences to invest in Guangzhou.





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