Others News
- Xinxing hopeful about McWane JV
Date: 14-Mar-2007 Sources: (Shenzhen Daily)
DOMESTIC pipe manufacturer Xinxing Ductile Iron Pipes Group Co. still hopes to finalize a joint venture with U.S. family-owned pipe and valve manufacturer McWane Inc., despite snags, its chairman said yesterday.
Xinxing Pipes and McWane said in July they would set up a 3.21 billion yuan (US$414.9 million) joint venture in Hebei to make ductile iron pipes and drain pipes. Xinxing Pipes would hold 70 percent to 75 percent of the venture, Liu Mingzhong said.
'We need to talk some more because of cultural differences. They may have misunderstood some of what we said and we may have misinterpreted them. But there are no fundamental problems,'Liu said.
He did not further elaborate.
McWane senior vice president Mike Keel declined to comment on the status of the proposed joint venture, citing a confidentiality agreement signed between the two firms.
'We have entered a marketing agreement for some of their products in certain geographical areas, primarily Latin America. That's all I'd like to say for now,'he said.
'We're good friends and we continue to talk on a regular basis about a number of projects,'he said.
McWane makes water and sewer pipes, valves and fire hydrants. A plant in Hebei Province makes pipe fittings for export to the United States, McKeel said.
Xinxing Pipes hopes to expand into high-margin pipes lined with stainless steel that are used in natural gas fields, Liu said.
If the joint venture with McWane succeeds, Xinxing would ultimately hope to spin it off in an initial public offering.
Xinxing Pipes expects to grow by at least 10 percent a year through 2010. Revenues in 2005, the last year available, were 17 billion yuan.
The firm, originally founded by the military, also plans to list its uniform and shoe manufacturing unit by mid-2008. It is considering either a Shanghai or overseas listing.
Xinxing made 77 million uniforms and 150 million pairs of shoes last year. Its focus on industrial clients rather than retail sales leaves it less vulnerable to sudden tariff changes due to trade disputes, Liu said.
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