RHI Magnesita Focuses on Raw Materials Supply with Dolomite Plant Investment in China
The Chizhou site includes a dolomite mine and raw material production, as well as facilities for the production of high-quality dolomite-based finished products.
RHI Magnesita recently announced that it plans to increase investment in the strategically important Chinese market by investing more than €20 million (approximately $23.4 million) in its dolomite plant in Chizhou, Anhui Province in China. This move is part of a response to address global pressures in the supply of raw materials to the refractories industry and provide additional volumes to the company’s customers worldwide.
The Chizhou site includes a dolomite mine and raw material production, as well as facilities for the production of high-quality dolomite-based finished products. Successful trials are already underway in the brick plant in Chizhou, where it is planned to start production by the beginning of 2019. The raw dolomite mine is planned to resume operation by the end of 2019. According to RHI Magnesita, the overall investment will eventually lead to the creation of up to 250 jobs.
“One of the reasons for the merger of RHI and Magnesita last year was to create a global leader in the refractory industry capable of capitalizing on growth potential including in China and Asia,” said Stefan Borgas, CEO. “After a detailed analysis of the global supply situation for refractory raw materials, as well as of our own production and supply chain, we have taken swift and decisive action to invest above €20 million in the Chizhou site in China, further enhancing our leading global market position. After the completion of the investment, RHI Magnesita will be able to offer a fully integrated dolomite source in each of the big regions of the world to our customers and simultaneously offer dual sourcing options.”
The refractories industry as a whole is currently facing a number of challenges, particularly in relation to the supply of basic raw materials. Stricter environmental regulations in China have led to local plant closures, resulting in shortages of both magnesite and dolomite, dramatic increases in raw material costs, and supply security issues. These developments have accelerated the shift from magnesia to dolomite-based products. The all-time high in stainless steel production has further fueled demand for refractories products and compounded the pressure on raw material supplies, creating challenges for all market participants.
According to RHI Magnesita, the investment in Chizhou ensures long-term production cost security. “The increased availability of our own raw materials is crucial and enables us to guarantee not only the security of supply but also consistently high-product quality,” said Marco Olszewsky, president, China for RHI Magnesita. “We are confident that our Chinese and Asian customers will benefit from even shorter supply routes and better customer service.”
In the medium term, more than 250 jobs will be created at the brick plant and raw material mine in Chizhou. During the planning and startup phase, an international, Chinese-led team of dolomite experts is being assembled to ensure the success of the project.
In addition to Chizhou in Anhui Province, RHI Magnesita already operates three other production facilities and several sales offices in China. In total, RHI Magnesita employs around 2,000 people at production sites in Dalian, Bayuquan, and one production and raw materials site in Dashiqiao (all in Liaoning Province), as well as at the head sales office in Shanghai.
Additional details are available at www.rhimagnesita.com.