Asia Pacific


Asia Pacific: maintaining a steady course

China: diversifying potential

Both automotive and energy, two fast-growing sectors in China, performed outstandingly in 2010. To support the sustainability of our operations in Asia, we continued diversifying our portfolio in the region, which was accelerated with continued investments.

All through 2010 China continued its growth path, reflected by a GDP growth of around 10%. This positive trend, however, is expected to reach more controlled levels in 2011.

There was a steady increase in Chinese infrastructure investment in 2010. Automotive sales grew significantly: 30% more passenger cars and in excess of 75% more commercial vehicles were sold. As for energy and utilities, the country’s electricity generation increased by 16%. Major investments, for instance in new power transmission lines, further boosted the country’s power grid capacity.

China spared no effort to meet the strict energy-conservation goals of its 11th Five Year Plan (2006-2010). In the course of 2010, it began shutting down outdated capacity in major industrial sectors including power, coal, steel, cement, non-ferrous metal, coke, paper, tannery and printing. In addition, new regulations on foreign direct investments were announced, stimulating high-tech industries, services sectors, energy-saving and environmental protection while discouraging polluting and energy-gorging projects.

To strengthen our position in the tire cord market, in 2010 Bekaert acquired the tire cord plant of Japanese tire manufacturer Bridgestone in Huizhou (Guangdong Province, China) and entered into a long-term supply agreement of tire cord to Bridgestone. With this acquisition – and similarly that of Bridgestone’s tire cord plant in Sardinia (Italy) – we further consolidated our long-term partnership relation with this major customer. The new Huizhou plant will be developed as Bekaert’s growth platform in the southern part of China.

In 2010 we acquired the former Bridgestone steel cord plant in Huizhou, China. The plant will play a major role in our growth strategy in the southern part of China.

The new Tire Industrial plan that was issued late 2010 in China supports the growth of our steel cord business as it aims to raise the radialization rate for large bus & truck tires to about 100% in 2015.

A milestone in eco-efficiency: Bekaert’s greenest steel cord plant

We expanded our steel cord plant in Shenyang (Liaoning Province, China) to boost our tire cord capacity in the region. In the expansion works we deployed the newest technologies for optimized energy conservation, reduced environmental impact and enhanced workspace comfort, making it our greenest steel cord plant ever worldwide.

We designed and manufactured new equipment for optimized energy-efficiency. Immediate measurable results include an 18% reduction in CO2 emissions, a waste volume decrease by a factor 8; a 35% cut in material handling loads, and a decrease in machine noise exposure by 8 dB(A) on average.

This milestone in the sustainable development of our manufacturing footprint is the result of several Bekaert teams operating better together and could only be achieved with support from the Liaoning Province and the Shenyang City and Economic & Technological Development Zone government. The Shenyang expansion project fits perfectly within China’s energy-conservation goals as described in its 11th Five Year Plan.

Ready to tap into growing energy business

Supporting China’s ambitious ‘green’ goals

The Chinese government is determined to make further strides in terms of emission reduction and pollution control. Its decision taken in late 2009 by which it aims to reduce its carbon intensity (the amount of carbon emitted per unit of GDP) by 40 to 45% by 2020, compared to the 2005 level, demonstrates this commitment.

With the ‘greenest plant’ initiative, Bekaert is actively supporting the targets set by the Chinese government and the Liaoning Province in terms of energy conservation and environmental protection. By choosing Shenyang as the location of our greenest plant, we contribute to the development of Shenyang as a national ecological model city. Considered a prime example of energy-efficient industrial construction in the city, the Shenyang plant received in December 2010 the “Demonstration of a state-of-the-art ‘green’ building” award from the Shenyang Urban-Rural Construction Committee.

Also within the framework of this Five-Year Plan, China invested heavily in new electricity grid infrastructure in medium and low-voltage crosslinked polyethene cables as well as extra high voltage cables. Bekaert also benefited from these investments in the power distribution sector with our dedicated offerings. In the renewable energy market, our sawing wire business recorded excellent performance triggered by the still strong demand for solar panels in Europe.

Our participation in the spring wire and overhead conductor business of the state-owned company Xinyu Iron & Steel Co., Ltd in Xinyu (Jiangxi Province, China) is of strategic importance to fully capture the potential of this growing business opportunity. This deal will ensure the immediate extension of our wire business in China. The integration of the activities will strengthen our position in the Chinese market and adds complementary technologies and applications to our existing product portfolio in both the automotive and utilities sectors.

In order to increase manufacturing capacity and technological capabilities the existing plant will be upgraded and a new building will be erected on the plant site to accommodate all spring wire activities.

Building on our strong foundations

In 2010 we inaugurated a brand-new facility for our Asian R&D activities – Bekaert’s second worldwide, complementing our center in Deerlijk (Belgium). In the Asian facility, Bekaert’s 350 researchers and laboratory technicians combine their know-how to provide fast and appropriate support to Bekaert's customers and operations in a wide range of activities. Examples are laboratory services for material analysis, prototype development and production, and specific R&D.

As for our building materials, in 2010 we laid down the foundations for a strong business. Sales rose strongly throughout the year. To cater to market needs, we started production of special Dramix® steel fibers for high-performance concrete used in infrastructural precast applications. As a service center for our Asian customers we opened a concrete lab in the Bekaert Asia Research and Development Center in Jiangyin (Jiangsu Province, China).

Challenges looming ahead on the horizon

The considerable investments made in 2010 in our production platform in China, in the diversification of our product portfolio and in creating a future-proof R&D facility were major steps in the right direction.Many challenges still lay ahead in China for Bekaert. For one thing, Bekaert continues to focus on establishing an organization capable of supporting its strong growth in the region. This includes ensuring an optimal working environment for our workforce and maintaining an open dialogue between management and staff. However, other measures must be taken to successfully maintain our strategy.

For now, the automotive and utilities sectors are growing in China and generate good business for our steel cord and wire activities. But we intend to be ready to offer new and innovative Bekaert products and applications for other sectors as well. Further investments in broadening our production platform, therefore, are likely in order to improve our market position in China.

India and Indonesia

India and Indonesia: sustaining steady growth

Our production platforms in both India and Indonesia performed at maximum capacity utilization. To meet increased demand we continued to expand our capacity and broaden our product portfolio.

India: land of opportunities

India’s strong GDP growth (+8%) continued in 2010. The Indian economy remained generally unaffected by the global economic downturn thanks to large-scale government support, a strong domestic performance and major infrastructure projects.

Both the construction and the automotive markets have grown considerably in recent years and will continue to do so in the years to come, driven by increased consumer purchasing power and by government infrastructure projects for commercial and residential building, rapid transit rail systems, and roads. India’s National Highway Development Program is one of those ambitious infrastructure projects.

The convergence of government policies, economy’s growth and people’s purchasing power have all contributed to the phenomenal growth of the Indian automotive industry. Further growth can be expected from the execution of the National Highway Development Plan, the largest highway upgrade project with a planned investment of USD 48.4 billion:            30 644 kilometers of highway to be built through 2015. Today 3 out of 4 radial tires in India use Bekaert steel cord.

In 2010 all of Bekaert’s major local customers invested massively in truck and bus radial tire capacity and expanded investments to passenger car radial tire capacity as well. As a result, our tire cord business in India performed outstandingly in 2010. Sales of hose reinforcement and building products also experienced sustained growth.

Sales of Bekaert’s building products increased by 70% over 2009, with the completion of 127 projects including important references at Toyota, Coca Cola and Mahindra. In order to meet the strong increase in demand, we boosted production capacity, stepped up investment plans and optimized efficiency in our existing infrastructure.

At our plant in Ranjangaon, which produces steel cord, wire and filtration products, we launched targeted programs to increase equipment efficiency. We commissioned the new expansion for the production of tire cord for passenger car radial tires. Other expansions were put on the fast track.

Thanks to the launch of new production lines for passenger car, trucks and bus radials, our steel cord plant in Ranjangaon was able to increase its capacity by 45% in eight months. In addition, we began the construction of three new bays at the plant to keep pace with the increased market demand for truck and bus radials and hose reinforcement wire. Our advanced filtration activities achieved a major milestone with the production of the first leaf discs.

Towards the end of 2010, we installed a production line at a new flat and shaped wire factory in our Ranjangaon plant. This facility manufactures shaped high-carbon and stainless steel wire.

In the presence of Their Royal Highnesses Prince Philippe and Princess Mathilde of Belgium we inaugurated the Bekaert India Technical Center in Ranjangaon. In line with its strategy of technological leadership, Bekaert aims to support its customers in India with enhanced technical services in the form of product quality testing, technical assessments and related dedicated assistance.

Bekaert Engineering India, for its part, started its first assembly unit in the Ranjangaon plant.

At the new Mukand Bekaert wire facility in Lonand, output increased gradually throughout 2010 as both export and domestic sales increased. We focused on the added value segments of spring wire and welding wire and achieved significant improvements in production efficiency. The plant reached high capacity levels throughout 2010.

Indonesia: foundations for a broader base

Easily obtainable credit and low interest rates, coupled with an abundance of new, locally assembled low-priced car models, fueled the boom in the Indonesian automotive sector in 2010. Both industrial and commercial construction markets continued to experience strong growth.

The performance of our production platform in meeting the rise in demand in Indonesia was outstanding. As a result of excellent quality, high service levels and optimal operational performance, Bekaert has become a preferred supplier for its customers in the region. For Dramix® steel fibers and our wire activities we received in 2010 the ISO 9001 certification. For our tire cord activities we were certified ISO TS16949, a crucial certification required by the automotive industry.

At our production site in Karawang a large expansion is ongoing to cope with the strong growth in steel cord demand. The radialization rate of truck and bus tires is increasing in the region. At the same time, a large portion of our customers are expanding their production capacity for export business.

In addition to ensuring that it has the capacity to meet growing demand from customers in Indonesia, Thailand, Malaysia and Vietnam, Bekaert aims to develop the steel cord plant in Karawang also into an overseas export platform.

At Bekaert Advanced Filtration production increased by more than 50%. Further strides were made in terms of product diversification with new products for the oil, gas and petrochemical industries.

Our Indonesian plants are ideally positioned to serve both the domestic and broader Asian Pacific markets.

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