Launch

Lufthansa Cargo JV launches maiden flight

The Sino-German JV between Lufthansa Cargo and Jade Cargo International launched its first commercial flight from Shenzhen to Amsterdam which took off from Shenzhen Baoan International airport on August 5. Stefan H Lauer, a member of Lufthansa's executive board, said "Shenzhen airport is currently under-utilised and we hope the launch of Jade Cargo will give it a real chance to play the important role in logistics that the airport deserves in this region." Lufthansa holds a 25 percent stake in the JV, Shenzhen Airlines holds 51 percent and DEG (Deutsche Investitions und Entwicklungsgesellschaft) the remaining 24 percent. The JV plans to have a fleet of six Boeing 747-400 freighters with a list price value of US$1.3 billion by 2008. Lufthansa CEO, Wolfgang Mayrhuber, said the "joint venture underlines the innovative approach of the Lufthansa Group to the Chinese market, where Lufthansa is already active with more than 10 joint ventures." China accounts for 15 percent of Lufthansa's global revenue and is the German airline's largest market in Asia.

Solvay, Lantian set up new JV

Solvay and Lantian Environmental Protection Hi-Tech announced the formation of their joint venture, Zhejiang Lansol Fluorchem Co Ltd. It will be based in Zhejiang Quzhou Hi-Tech Industrial Park, 500 kilometres southwest of Shanghai. Solvay is an international research-based pharmaceuticals company with headquarters in Brussels, and Lantian is a Zhejiang-based fluorochemicals producer. The JV will supply hydrogen fluoride for high-value added fluorinated products. Vincent De Cuyper, General Manager of the Chemical Sector at Solvay, said "China is the world's largest producer of Fluorspar, the mineral needed to produce hydrogen fluoride. China and Asia are also the places where Solvay wants to grow its fluorinated specialties activities." Lantian will own 70 percent of the joint venture, while Solvay will hold the remaining 30 percent. The venture is scheduled to start operations in 2007 and will have an annual capacity of 20,000 tonnes.

Opening

DSM opens Shangdong plant

Netherlands-based DSM, a manufacturer of animal nutritional ingredients, opened a new feed premix plant in Liaocheng, Shandong province. The new plant will produce 15,000 tons of vitamins and mineral premixes a year to supply customers primarily in Shandong, Hebei and Henan. It is the company's second feed premix facility in China after DSM Vitamins Limited plant in Shanghai. Jos Schneiders, President of Animal Nutrition and Health, DSM Nutritional Products, said "The new plant provides an accelerated growth path into the Asian and Chinese feed market, from which our new and existing customers will benefit." DSM has invested in China for over a decade and is currently involved in eight joint ventures and has six sales offices across the country. Altogether it employs more than 3,500 people in China. It is a leading global supplier of vitamins, carotenoids and chemicals to the food, pharmaceutical and cosmetic industries.

Standard Chartered opens 11th mainland China branch

Standard Chartered opened a new sub-branch in Shanghai's upscale business and leisure zone Xintiandi, bringing the total number of the UK-based bank's branches in mainland China up to 11. The addition to Standard Chartered's presence in China comes as many foreign banks seek to expand further on the mainland in anticipation of the opening of the retail banking sector. According to Katharine Tsang, CEO of Standard Chartered Bank China, "People accumulate more wealth but have less spare time. Therefore, one-stop banking services and flexible business hours are needed, and that is also why we locate the new sub-branch in the high-end business zone of Xintiandi." The new branch's business hours will be from 10am to 8pm Monday to Saturday. Christine Ip, head of Consumer Banking at Standard Chartered China, said the UK bank also plans to open new sub-branches in Beijing, Guangzhou, Suzhou and Chengdu by the end of 2006. According to Ip, Standard Chartered is ready to launch its QDII (qualified domestic institutional investor) products once it wins approval from Chinese banking regulators. The bank also announced the debut of Excel Banking which offers personal banking and wealth management services for the Chinese market, targeting young professionals and young executives.

Deals

Snecma and Xinyi sign turbine blade JV

Snecma, the largest subsidiary of France-based Safran Group, signed a contract with Xinyi Machinery Factory based in Guizhou for a joint venture manufacturing turbine blades for aircrafts. The deal was signed under the China Aviation Industry Corporation (CAIC). The partnership will involve an initial investment of US$15 million to build a production line for CFM56 engines, the most commonly used aero engine in the world. Marc Ventre, CEO of Snecma, said "We have enjoyed good cooperation with Xinyi in the past 10 years and we see the cooperation in a long-term way." Snecma has links with eight Chinese aviation companies employing more than 2,000 local staff. Safran's ties with China stretch as far back as the 1930s when it sold engines to the Chinese army and in the 1970s provided Chinese civil airlines with CFM56 engines.

Danisco acquires leading CMC producer

Danisco has acquired Zhangjiagang Sanhui Chemical, China's largest supplier of cellulose gum (CMC) to the China market. The deal will complete Danisco's existing production base of hydrocolloids which provide texture and act as a stabilizer in food products and cosmetics. Zhangjiagang Sanhui has a low-cost plant, now wholly owned by Danisco, which is 120 kilometres outside Shanghai and already supplies several multinational food companies. The plant employs 250 people and has sales of nearly US$17.2 million. President of Dansico Textural Ingredients, Hans Henrik Horth, said "Our technical people already know CMC fairly well and we have an established sales force visiting CMC customers." Danisco will inject investment into improving standards at the plant where the quality of CMC is adequate but, according to Horth, may lack in product variety found in other countries. He said "With [Zhangjiagang's] competitive cost structure and Danisco's worldwide sales network and technical service, we expect Danisco to become an important player on the world market for cellulose gum."

AP Moller-Maersk acquires stake in COSCO

AP Moller-Maersk signed a contract with COSCO Pacific Ltd to gain a 33.9 percent stake in its unit COSCO Ports (Nansha) Ltd. After the acquisition AP Moller-Maersk will indirectly hold a 20 percent equity interest in Guangzhou South China Oceangate Container Terminal Co Ltd, a JV between COSCO Nansha and Guangzhou Port Group Co Ltd. COSCO Pacific said Guangzhou South China Oceangate Container Terminal has a total investment of RMB4.01 billion. AP Moller-Maersk is the world's largest container shipping company and already has several joint ventures with COSCO Pacific in Qingdao, Shenzhen and Dalian.

Ericsson seals major expansion deals

Ericsson has signed GSM expansion contracts with China Mobile worth more than US$550 million covering 17 regions in China. Under the contracts Ericsson will provide China Mobile with radio and core networks, technical support and services and will also deploy its Mobile Softswitch Solution. The contracts will help China Mobile increase network capacity, improve operational efficiency and cut costs. When the projects have been completed the network between Ericsson and China Mobile will support up to 200 million subscribers. Mats H Olsson, President of Ericsson Greater China, said "We are very proud to be selected by China Mobile, once again, to expand its networks." China Mobile named Ericsson "Best Partner of China Mobile GSM Target Network Upgrade Project".