Top Australia steel maker BlueScope Steel has made moves to ensure it takes a bigger stake China's growing building and construction markets.

It signed a contract with the Huangpu District of Guangzhou yesterday to inject US$35 million into a new manufacturing plant, covering an area of 120,000 square metres, in the booming capital city of Guangdong Province.

The new project will increase the accumulative investment of BlueScope in China to around US$400 million, according to the company.

The new facility, due to be operational in mid-2006, will produce BlueScope Steel's downstream products that incorporate a Butler manufacturing facility for pre-engineered steel buildings, which is contrary to the traditional concrete structure buildings, and complements an existing Lysaght roll-forming plant.

"South China is one of our most important markets and the completion of the new facility will help us provide better services to the customers here whilst cutting transportation costs," Moufid Alossi, president of BlueScope Butler China, told China Daily.

Last year, BlueScope bought US company Butler Manufacturing Co, a world leader in non-residential pre-engineered steel buildings, in an effort to diversify and strengthen its downstream products.

"The merger with BlueScope accelerates the development of Butler in China," Alossi said, noting that the construction of the new facility in Guangzhou is ahead of schedule.

Currently, Butler has two manufacturing plants in East China's Shanghai and North China's Tianjin, of 125,000 and 100,000 square metres in size. Together, they have a total production capability of about 4 million square metres of Butler branded building materials each year.

"Unlike developed countries, China's construction market is still in its prime, and we expect the industry to flourish in the next 20 to 25 years," said Alossi.

Since it entered the Chinese market in 1992, Butler has completed more than 1,015 projects, or one every five days on average, with a combined area of more than 13 million square metres in 20 provinces, autonomous regions and municipalities around the country.

From 1997, when its first plant came online in Shanghai, Butler's revenue has grown by 40 per cent each year, said Alossi.

And the prices of Butler products have decreased by 38-40 per cent when compared with those of items exported from the United State in the previous few years, he added.

More local companies using their products and services further cements the brand's leading position in China's multi-storey pre-engineered steel building market.

About 80 per cent of Butler's current clients are Chinese home-grown companies, compared with the firm's totally foreign-funded client list in its first few years in China, said Ding Fubao, manufacturing vice-president of BlueScope Butler.

Steel structure expert He Baokang said the industry has a rosy future given that China has become the world's largest steel producer.

"The country produced a total of 240 million tons steel last year, but only 3 per cent of that was used in steel structure buildings," He said. In developed countries, this figure often climbs higher than 10 per cent.

According to the country's long-term plan, the construction of steel structure buildings is encouraged because they are less polluting. "Steel structure buildings will account for 6 per cent of total steel consumption by 2010," he said.

Source: China Daily