China: Joint venturein China - Liaoyang Voith Sulzer Paper Machinery

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66 China: Joint venture in China 3 Liaoyang Voith Sulzer Paper Machinery Co. Ltd. The close cooperation between Voith Sulzer companies and Liaoyang Paper Machinery Co.

Ltd, in the north-east Chi- na province of Liaoning, started in 1986. At that time J.M.Voith AG,St. Pölten/Aust- ria 3 responsible then for Group paper machinery marketing in the P.R.

of China 3 was looking for a joint-venture licensee among leading Chinese paper machinery firms. Negotiations were held with the Ministry of Light Industry, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), and the China National Import and Export Corporation (CNTIC). The Liaoyang Paper Machinery Works (LPMW), as it was then called, was rec- ommended as most suitable partner.

In 1987 LPMW signed a licence agree- ment with J.M. Voith AG for manufactur- ing packaging paper and board machinery components in the People 9s Republic of China. From 1986 to 1997, no fewer than nine large orders were completed on this basis for the Chinese paper industry, with equipment made in China worth around 250 million RMB (30 million US$) and imports worth around 50 million US$.

The authors: Mr. Zhao Juntal, Chairman of the Board, LVSC; Heinz Appenzeller, General Manager LVSC; Walter Müllner, Voith Sulzer Paper ... more. less.

Technology, chief representative in Beijing. 1 Corporate News 67 Fig. 1: Liaoyang city centre. Fig. 2: Multi-fourdrinier board machine in Zhuhai. Fig. 3: Dryer roll, 1500 mm dia. These orders included the first Duo- Former H for Jin Cheng paper mills, a linerboard machine for the Wuhu Dong Fang paper mill, several cylinder mould former carton machines, and multi-four- drinier board machine for Hongta Ren- hang mills in Zhuhai. Based on these positive results with LPMW and in view of Chinese market development potential for packaging and board machinery, Voith Sulzer Paper Technology approved a joint venture in 1994 between J.M. Voith AG and Liaoyang Paper Machinery Co. Ltd for marketing and manufacturing dryer sections and rolls. Apart from the expected growth of paper consumption in the People 9s Republic of China and the associated import of very large production aggre- gates, a decisive aspect here was the urgent need for modernizing or replacing small to medium size machinery at rea- sonable cost. Clearly this need could only be met through adequate production of paper machinery components in China with modern know-how. Negotiations there- fore started in 1994, and the new joint venture was signed in March 1996. After the necessary permits and business licence had been granted by Voith Sulzer Paper Technology and the Chinese authorities, this joint venture agreement finally came into force on March 20, 1996. 2 3 68 J.M. Voith has a 60% share in this joint venture, with total assets around 17 mil- lion US dollars. The LVSC headquarters and plant build- ings are set up on a 25,000 m 2 site right next door to Liaoyang Paper Machinery Co. Ltd. Apart from a small administration building for the company management, sales department, financial and technical departments, the three machine shops cover an area totalling 10,000 m 2 . One shop is equipped for machining dryer rolls and other heavy workpieces up to 32 tonnes (max. casting weight 25 t). Rolls up to 8000 mm wide and 2200 mm dia. are machined and dynamically bal- anced here, likewise small tissue rolls up to 3600 mm dia. and 3800 mm wide. In the second machine shop press rolls and pope rollers are machined in dia- meters up to 1250 mm and widths up to 12,000 mm, depending on diameter. Here again, maximum workpiece weight capacity is 32 tonnes. The third shop is for works assembly and dispatch. Raw castings for dryer cylinders are supplied by the LPM Co. Ltd foundry, which is being modernized and expanded to improve quality and enable roll castings up to 1800 mm diameter and 8000 mm wide. After expansion work is completed, the foundry and roll machine shops will have a mean capacity of 4 6 5 Fig. 4: Dynamic balancing machine. Fig. 5: Vertical boring mill. Fig. 6: Press section of a board machine in Zhuhai. Corporate News 69 Fig. 7: The Liaoyang Voith Sulzer Paper Machinery Co. Ltd. team. 420 dryer rolls per year (depending on diameter and width). These shops can turn out up to 150 cast rolls and 250 to 300 pope rollers. The sales department of Liaoyang Voith Sulzer Paper Machinery Co. Ltd. (LVSC) works closely with the Voith Sulzer Paper Tech- nology office in Beijing and with the sales departments of Voith Sulzer Paper Tech- nology companies. Particularly important in this connection is that with our Chinese partner and/or Voith Sulzer Paper Technology companies as key component suppliers, the LVSC joint venture can deliver complete paper machines. The importent role played in future by LVSC in connection with large Voith Sul- zer Paper Technology contracts in China will included the placing of local produc- tion which cannot be handled by LVSC or LPM Co. Ltd. According to current planning, human resources will be expanded to 221 employees in the final phase. Two Voith Sulzer Paper Technology managers are permanently located at LVSC headquar- ters, and if necessary they can be sup- ported by additional personnel according to specific requirements. Liaoyang Voith Sulzer Paper Machinery Co. Ltd. has received tender inquiries for projects in China, Korea, Iran (in connec- tion with Chinese development aid) and from an Austrian/Chinese joint venture. The first small orders have already been booked, and further orders are expected by the time the production plant starts operating in mid-1997. This new company is clearly going to reach its ambitious targets. 7

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