Contracts
* Iritechnica signed a contract last July for the construction in Anshan of a centre for the production of unsoldered tubes. The value of the order was US$322m.
* In September 1992, in the presence of the Chinese vice premier Zou Jiahua and the president of the Ferruzzi Group, Arturo Ferruzzi, ' a contract was signed allowing Technimont to build a plant in Maoming, for the production of polypropylene with a capacity of 140,000 tons/year. The value of the order totalled approximately US$80m.
The company also plans to build an ethylene plant in Guangzhou, the contract for which was signed last January.
* TPL won a contract worth approximately US$100m for the building of a plant in Jiangsu, for the production of 50,000 tons a year of terftalic acid.
* A new plant for the production of 300,000 Pirelli radial tyres for cars and by products has been inaugurated in Pechin. This is the second factory to be set up by the Italian company in China. Negotiations are also under way for new plants in different parts of the country.
* Alenia Company, part of the Iri-Finmeccanica group is building plants for air traffic control in China. The project comes within the framework of the 'Marco Polo' scheme which involves 12 Chinese towns, including Pechin, Shanghai and Guangzhou. The complete programme will facilitate coverage of the whole of the east of China.
* Snamprogetti, part of the Eni Group, has signed a US$64.5m contract with CNTIC for the construction of a polyethylene plant, with a capacity of 120,000 tons.
Two further contracts have been signed ? for an ethylene and polyethylene plant in Jilin province in northwest China, and for one in the oil field of Zhongyuan near Puyang, in Henan province. The orders are worth US$190m and US$64m.
* Pressindustria has finalised four contracts in China for the supply of four plants of etossilazione, two of which are already under way with a capacity of 60,000 tons per year each.
* Siemens Telecommunicazioni SPA has signed a contract in Beijing with China National Instruments Import Export Corporation to a value of US$5.1 m.
China is to buy a complete series of instruments from Siemens for the installation of 35 microwave stations along the telecommunications lines between Beijing and Shanghai.
* Noy V.E., part of the Radici Group, has won an order to the value of US$550m to build a plant for the production of poly-styrene fibres in Yizheng.
* Piaggio Veicoli has signed an agreement with Fosti Motorcycle Ltd of Foshan city, for the production and marketing of the scooter Sfera. The agreement is the first example of a Sino-Italian partnership in the two wheel industry, and could form the basis for future joint ventures. Piaggio will supply the Asian partner with engines, components, technical assistance and staff training. From the second half of this year, the real investment plans will take off to implement new mechanical factories.
* CTIP has signed the contracts with Zhonhonguan Petr.Co of Beijing for the supply of ethylene plants in Henan, at a value of US$130m.
* With the building of the Beijing Benetton Fashion Co Ltd, and the inauguration of the first shop, the Benetton Group has officially arrived in China.
The total investment for the operation is US$400m. The initial production will be for 11,000 items, increasing to 50,000 within the next ten years. The number of shops is also expected to increase.
* Olivetti has signed a series of important supply contracts with some of the most important Chinese banks. Olivetti has also won a contract to the value of US$2.1 m for the development of information systems of the Chinese Agricultural Bank.
According to the terms of the agreement, Olivetti will supply the bank in Shunde province with 150 workstations for banking purposes based on personal computer "PB ? Personal for Business" and 40 cash points.
The aim of the project is to develop the network of automisation of the bank's branches in the country from 100 to 250 agencies. The systems will enable transactions of a local and more distant nature of all the operations for savings, current accounts, and for cashpoint customers. Finally Olivetti has won a contract with the Chinese Industrial Bank in Beijing. The contract, whose value is about US$3m foresees the supply of 100 cash-points. The Industrial Bank of China is one of the biggest Chinese banks with 30,000 branches all over the world.
Joint ventures
During the last year, the following Italo-Chinese joint ventures have come about:
* Zanussi, the Italian subsidiary of the Swedish group, Electrolux, has formed a joint venture in China, through Zanussi Elettromeccanica, called Zanussi Electric Tianjin Compressor. The company aims to cover at least 35 per cent of the Chinese compressor market.
* An Italo-Chinese joint venture has recently been formed by Consorcop with the Chinese Tangshan Xingli Feather and Down Products Factory of Letting (Hebei). The new mixed company will be Tangshan Huayi Garments with a capital of US$1.7m and will produce clothing of which 70 per cent will be exported to Italy.
* The wool treatment factory Loro Piana, world leader for cashmere, has signed an agreement with a group of independent Chinese businessmen for the formation of a joint venture: Dalian Sanyou Armpit Hair Products. A factory at Dalian in Liaoning province will be built for weaving cashmere yarn. The Italian enterprise forecasts an investment of about US$5m in two years.
* Sacmi of Imola, world leader in the production of ceramic industry plants has formed a joint venture in Shanghai to build a model of machine for the tile industry.
* Enichem Synthesis has signed an agreement for a joint venture with the state chemical corporation for the production of carbofurano, a phytopharmacon used in agriculture. It is the first agreement of its kind made by a European company. The investment will reach US$7.9m and the production will be 1000 tons a year. The joint venture will be called Taichung Enichem Chemicals Company.
* Impexital of Viareggio, the national export bases development corporation and Zujia Shoes Group have formed a joint venture in Jiaxing in Zhejiang province, which has established the biggest shoe factory of China. The factory will produce 1.2 million pairs of shoes a year with an investment ofUS$2.6m.
* Himont Inc, a company controlled by Montecatini of the Ferruzzi-Montedison Group, and IMPEL (International Multi Petrochemical Enterprises Ltd) have formed a commercial joint venture on equal terms, to be called Montpel Ltd. This new joint venture will also facilitate the transformation of polypropylene into high value-added manufactured goods either for the Chinese market or the international one.
* Chonqing Italtel Communication Equipment Ltd has been established, a joint venture formed by Italtel and Chongqing Communication Equipment Factory, controlled by the Post Telecommunications Industrial Corporation (PTIC).
The new company whose headquarters are in Chongqing, will supply transmission systems in numerical technique and hybrid and printed circuits.
* Alenia Company, part of the Ira-Finmeccanica Group, has formed a joint venture with the industrial Chinese group Rida and with Dragon Investment of Hong Kong. The Italo-Chinese company, called Saphire, with capital of US$800,000 has a double aim:
to enforce the Italian company's position, which has been a world leader for air traffic control systems for ten years to increase its own presence in the Chinese market where the Japanese and French competition is very strong.
* Rabotti Nuova of Orbassano (Torino) has signed a contract to form a joint venture with Tai Experimental Equipment Manufacturing and Hong Kong Novel Technology for the production of machinery for diesel engines testing.
Information for this report was supplied by Mr. Paolo Bertolino at the Camera di Commercio Italo Cinese.
Services of the ICCC
The Italy-Chinese Chamber of Commerce (ICCC) was established in October 1970. It is a free enterprises' association, boasting more than 500 members, which aims to provide information about the legal, economic, and statistical aspects of doing business in China. This is done in various ways:
* Its publications: "Guida all'operatore in Cina' (A guide to foreign businessmen in China) is a collection of laws regulations, rules and procedures enacted in China, both on a national and provincial basis, from 1979, and is updated annually. The other is "Cina Notizie (China News), a bimonthly review of Chinese current affairs, and of the legal and practical framework of the Chinese market.
* Contacts: the ICCC puts Italian and Chinese business people in touch with counterparts to best suit their respective needs.
* Market surveys ? with information on import and export figures, customs regulations, output value and internal demand, local competitors and their scope of business, technological levels and, as far as possible, local prices.
* Contract drafting: the ICCC's personnel and external consultants offer support in the drafting of international trade contracts.
* Conferences and symposia as well as delegations to and from China.
Address: Camera di Commercio Italo-Cinese, Via Carducci 18, 20123 Milano, Italy. Tel: +39 2 862765 – 8057384. Fax: +39 2 72000236. Telex: 334384 ITCINA 1
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