China Metal Recycling Forms Joint Venture

China Metal Recycling (CMR), a China-based metals recycling firm, has announced that its CMR Tianjin subsidiary has formed a joint venture in Tianjin, China, with Tianjin Pipe and close to 12 smaller metals recycling companies. The planned joint venture will open and operate a recycling facility in Northern China.

CMR, which is contributing roughly $30 million toward the construction and operation of the facility, will own one-third of the business. The total cost of the JV is expected to be around $90 million.

The scrap metal facility will process a wide range of metals, and will provide dismantling of appliances and automobiles. In a release announcing the joint venture, CMR says that the facility will be used to set up a scrap metal processing base with 5 million tons of annual processing capacity in Northern China.

In addition to CMR, the other partners in the project, as well as their share of the joint venture, are the following: Beijing Xingwang Lilai Material Recycling Co. Ltd., 0.83 percent; Hebei Liangang Waste Metal Recycling Co. Ltd., 1.667 percent; Hejian City Qiaolian Steel Co. Ltd., 1.667 percent; Tianjin City Xinsheng Hongyun Waste Metal Recycling Co. Ltd., 1.667 percent; Tianjin City Huanda Industrial Co. Ltd., 1.667 percent; Tianjin Lishui Group Co. Ltd., 1.667 percent; Tianjin Zhendong Jitai Waste Recycling Co. Ltd., 2.5 percent; Tianjin Zhenghong Recycling Co. Ltd., 2.5 percent; Zunhua City Shimen Recycling Co. Ltd., 2.5 percent; Baotou City Tiandeli Recycling Resources Application Co. Ltd., 2.5 percent; and Tianjin Steel Pipe Xushui Steel Bolier Materials Co. Ltd., 10 percent.

Tianjin Pipe is a subsidiary of Tianjin Pipe Group Corp., which is majority owned by the Tianjin State-owned Assets Supervision and Administration Commission. The company’s principal business is manufacturing seamless steel and copper pipes. The company has an annual capacity of 3.5 million tons, and is the largest seamless pipe manufacturer in China and the largest single plant seamless pipe manufacturer in the world.

Tianjin Pipe Group, which uses scrap steel and scrap copper as major primary raw materials, has an annual requirement of more than 2.5 million tons of ferrous scrap and 200,000 tons of copper scrap.

CMR’s release notes that Northern China is the largest metal producing region in China with high demand for natural resources and scrap metals. However, the metal recycling industry in the region is highly fragmented with poorly equipped and small scale recyclers operating in the area.

CMR hopes that the joint venture will help to consolidate the metals recycling industry in the region. Further, the company says that the joint venture will satisfy 36 percent of the demand from the region.

The company expects to increase investments in the China market, continue consolidating the regional market, strengthening the joint venture group’s position in the market and capture a growing market in China.