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Acquisition marks major milestone in strengthening RHI Magnesita’s footprint in China and East Asia
RHI Magnesita today announces the acquisition of a majority shareholding in Jinan New Emei Industries Co. Ltd. (“Jinan New Emei”), a leading producer of refractories in China. The acquisition will enable RHI Magnesita to expand its product range in steel flow control refractories and its solutions contract offering in the Chinese domestic market, both of which are key strategic priorities. The acquisition will also give access to substantial new customer relationships in China and deliver additional production capacities for increasing supply of refractories in both China and the wider East Asia region.
Jinan New Emei is a leading producer of refractory slide gate plates and systems, nozzles and mixes for use in steel flow control, employing over 1,300 people and headquartered in Shandong province, China. A state-of-the-art, fully automated new plant with an annual production capacity of up to 80,000 tons has recently been commissioned at Laiwu in Shandong province, thus marking a main asset of the acquisition. RHI Magnesita expects substantial synergy realization opportunities from the combination of Jinan New Emei with RHI Magnesita’s existing refractory business in China.
Commenting on the acquisition, Stefan Borgas, CEO of RHI Magnesita, said: “This transaction represents an important step in the development of our flow control refractory business in China and is directly aligned with our stated strategy to grow through consolidation in fragmented new markets where we are currently under-represented. China is the largest steel market in the world, accounting for over 50% of global production, and the addition of Jinan New Emei to our existing Chinese operations will broaden our product and solutions contract offering for our steel customers, enabling us to better serve our domestic customers in China and the wider East Asia region.”
Marco Olszewsky, President of RHI Magnesita China and East Asia, added: “We are excited that Jinan New Emei, as a market leader and trusted long-term business partner, will complement our China steel product portfolio and strengthen our full line service offerings. This acquisition is a key milestone for us to deliver our strategy. We are ready to grow our business, leveraging substantial synergies to capture more market share in the world’s largest steel market.”
Li Qinglin, Owner of Jinan New Emei, commented on the transaction: “RHI Magnesita is a global leader in the refractory market with a strong worldwide network and deep-rooted footprints in China and East Asia. The focus on serving customer with quality products with high level of automation and innovation in China and East Asia is fully aligned with our strategy. Becoming part of RHI Magnesita’s network will drive better synergies and collaboration within the organization.”
RHI Magnesita will initially acquire a majority shareholding in Jinan New Emei. The acquisition is subject to competition authority clearance.