Launch

Degussa plans rubber JV

German specialty chemicals company Degussa announced that it signed an agreement with Rizhao Lanxing Chemi-cal Industry to establish a joint venture to manufacture sulfur-functional silanes for rubber applications. Degussa will take a 50 percent stake in the new ven-ture, and Lanxing will take 40 percent. An unnamed financial investor will hold the remaining 10 percent. The new com-pany, to be named Degussa Lanxing (Ri-zhao) Chemical Industrial, is scheduled to produce sulfur-functional silanes, used in tires, sports shoes and a range of other products. "Our joint venture facil-ity in China will produce for our custom-ers from the rubber and tire industries in Asia-Pacific who need our silanes to manufacture products that meet interna-tional standards," said Robert Wissner, head of Degussa's Advanced Fillers & Pigments Business Unit. Degussa, which has been producing specialty chemicals in China since 1988, now has 20 com-panies throughout the country, operating production facilities in Beijing, Guang-zhou, Nanjing, Qingdao, Shanghai and Hong Kong.

DHL-Sinotrans to open new operations center in Guangzhou

DHL-Sinotrans, a 50:50 joint venture be-tween China National Foreign Trade Trans-portation (Group) Corp (Sinotrans) and Deutsche Post unit DHL announced that it signed an agreement to establish a new op-erations center at Baiyun Airport in Guang-zhou, Guangdong province. The new center, which covers nearly 3,500 square meters, will become operational in March 2006. Besides the new Guangzhou facility, DHL-Sinotrans will also upgrade its facili-ties at Shenzhen, Hangzhou, Chengdu and Qingdao in 2006.

Deal

Veolia Water wins water management contract

Veolia Water announced that it won a 30-year contract worth over EUR1.6 billion to manage the water services for Kunming city, capital of Yunnan province. For the contract, the French water services pro-vider partners with a Hong Kong company to acquire a combined 49 percent stake in Kunming Water Supply, the local water ser-vices operator, with the municipal authori-ties retaining the remaining 51 percent. Under the contract, Veolia Water will help to manage the company's distribution network, optimize its efficiency and increase its coverage. Including Kunming, Veolia Water currently operates in 15 of China's 28 provinces.

Opening

BASF opens joint engine test facility

German chemical company BASF an-nounced the opening of an engine test facility in Beijing in conjunction with the Chinese Research Academy of Environmen-tal Sciences (CRAES) in mid-November. The lab will initially monitor fuel qualities in China and do research for developing future Chinese fuels and customized additives. BASF and the Chinese research body jointly invested about US$700,000 in the new fa-cility. "We consider the establishment of an engine test facility in Beijing to be a con-tribution to sustainable development in the Chinese growth market - a market that is of considerable importance to BASF," said Dr Andreas Kreimeyer, the BASF Board mem-ber responsible for the Asia Pacific region. The joint development of the lab is based on an agreement between the two partners signed in July 2004, with an aim to im-prove the quality of Chinese gasoline and to adapt it to the requirements of the latest engine technology.

Akzo Nobel inaugurates new powder coat-ings site

Akzo Nobel announced the opening of a new powder coatings plant in Langfang, Henan province. The facility is the Dutch chemical company's fourth such production site in China, following factories in Baoan (Guangdong province), Suzhou (Jiangsu province) and Ningbo (Zhejing province). Akzo Nobel invested a total of US$4.9 mil-lion in the 22,000-square-meter site. "The four powder coatings sites we now have in China are ideally positioned from north to south to supply all sectors and respond to general market growth," commented Hans Wijers, CEO of the company.

Others

Deutsche Bank invests in Huaxia

Deutsche Bank will lead a consortium to take a 14 percent stake in Huaxia Bank for US$329 million, Reuters reported. Deutsche Bank will control a 9.9 percent stake, mak-ing it the second largest shareholder, with German private bank Sal Oppenheim tak-ing 4.1 percent, subject to shareholder and regulatory approval. The deal was thought overpriced, largely due to Deutsche Bank's rush to make its first direct investment into China's banking industry.

Airbus considers assembly line in China

Airbus and China signed an agreement to look into the possibility of setting up an as-sembly line in China, a move that could see Airbus jets being built outside Europe for the first time, Reuters reported. The sign-ing took place at the start of Premier Wen Jiabao's trip to France, which is widely expected to see China place an order for 70 A320 single-aisle Airbus aircraft worth US$5 billion. Airbus said it had committed to boost fourfold the value of components it buys from China to US$120 million by 2010. The European company's American rival, Boeing, clinched a 70-jet deal dur-ing US President George W Bush's visit to China last month.

BP to invest US$45.1million in CAO

The board of UK oil giant BP has approved a plan to invest US$45.1 million in Singa-pore-listed jet-fuel trader China Aviation Oil (CAO) (Singapore), The Wall Street Journal reported. BP, which is one of the company's biggest creditors, plans to take as much as a 22.78 percent stake in CAO provided that Temasek, the Singapore government's in-vestment arm, also comes on board as an investor. CAO's state-owned parent compa-ny, China Aviation Oil Holdings, has said that it and an unnamed investor will inject US$130 million into the company so it can service debts related to the US$550 mil-lion losses incurred trading oil derivatives in 2004.

China Netcom offered seat at Telefonica International Board

Spanish telecommunications operator Tele-fonica offered a seat on the Telefonica Inter-national (TISA) Board to a representative of China Netcom, of which Telefonica owns a 5 percent stake. The offer was made dur-ing Chinese president Hu Jintao's visit to Telefonica's National Center of Operations Monitoring in mid-November. Telefonica chairman C¨¦sar Alierta, who also attended the visit, highlighted the commitment of Telefonica to Chinese technology, with the company's investment in Chinese technology rising five times in 2004 over the previ-ous year.

Gide Loyrette Nouel awards prizes to Chi-nese law students

Gide Loyrette Nouel recently awarded the "GLN China Prize 2005" to six winners of the competition, open to all Chinese final-year LLM students. The "GLN China Prize", organized by the French law firm, is award-ed every year, in alternation between Bei-jing and Shanghai, with the participation of some of the cities' universities. First prize winners will gain a three-month internship with the firm (two months in Shanghai and one month in Paris); second prize winners will serve a two-month internship with the firm in Shanghai and third prize winners re-ceive a gift of law books.

Ferrari 15,000 Red Miles Tour

Ferrari races to enter the Chinese market and raises money for charity at the same time

On August 29, two Ferrari Scagliettis began an unprecedented tour of China that saw them pass through 37 Chinese cities in 45 days. Tuned to face any sort of technical and environmental difficulties, the two cars left Shanghai to undertake a trip of more than 24,000 kilometers that concluded on October 29.

Never before had an automotive company embarked on such an adventure. Fifteen provinces were crossed, stretching from Liaoning to Guangzhou, from the Takalaman desert in Xinjiang to the snowy peaks of Tibet. People joyfully welcomed the cars to their cities and meetings were held with local authorities. More than 400 hours were spent at the wheel and up to 900 kilometers were driven each day. Road conditions were often very poor and so the tour encountered many unpredictable situations. Nevertheless, the trip was successful and, all in all, only two wheel rims were damaged.

Aside from technicians and mechanics, there was staff present from after sales, PR, marketing, communications and logistics. They were all constantly involved in the tour. The prominent logistical assistance was provided by Fiat China and the entire project took place with the contributions of major sponsors: Shell, Puma, Alcoa, Pirelli, Saima Avandero and the Xin Yu Watch from China.Over 50 journalists, both domestic and foreign, joined the event, even driving the two Fer-raris along some of the journey legs. At the arrival back to Shang-hai, the Oriental Pearl Tower - the symbol of the metropolis - lit up in red to celebrate the accomplishment and Ferrari's first year in China.

The Ferrari Maserati Cars International Trading Company was, in fact, first set up in China in August 2004. Since 1993, the Chinese market had been ac-cessed via a Hong Kong importer. Once Ferrari finally established a trading organization on the main-land, the idea rose of launching the 25,000 mile tour as a means to fully dive into the Chinese mar-ket. As import restrictions have eased up and development keeps boosting the country, the Pranc-ing Horse is expecting China to quickly become one of its six leading markets. As of November 2005, the dealer network already covers 10 Chinese cities (Shang-hai, Beijing, Guangzhou, Panyu, Shenzhen, Hangzhou, Qingdao, Chengdu, Xiamen and Chongq-ing) and in 2004 Ferrari received the "Renowned Brand" award, donated by the Chinese Office of Trademarks. Such a tribute had never been assigned to an Italian brand before, and Ferrari's achievement is undoubtedly a positive sign for the company's efforts to pave its way into the Chinese market.

The tour was a mission of charity as well. Along the jour-ney, several visits were paid to local 'Project Hope' schools. Needy children were provided with books and toys, altogether amounting to RMB100,000. The main targets were those children based in remote areas where daily life and education is filled with difficulties and constraints. At the end of the tour, one of the two Ferrari 612 Scagliettis was auctioned off in Beijing and raised RMB3.4 million in aid of the Soong Ching Ling Foundation.


Corporate Sponsors of the European Chamber

The main sources of financing for the European Chamber of Commerce in China are memberships and Corporate Sponsors. At present the EUCCC has 25 Corporate Sponsors and the Ex-ecutive Committee recently approved a maximum number of 25. For more information on becoming a corporate sponsor, please contact the chamber at euccc@euccc.com.cn or 010 6462 2065/6.