American cutting tool maker Kennametal launched its third factory in China here Friday in Tianjin, a port city near Beijing.

Located in Tianjin Economic and Development Area(TEDA), the new plant is Kennametal's biggest in China, one of the biggest production base worldwide.

The plant bears an initial investment of 31 million US dollars, covering an area of 15,000 square meters.

It will mainly produce blades, drills and wear parts for industrial use, and provide customers with specific tooling solutions.

Carlos.M.Cardoso, president and CEO of Kennametal said China's dynamic economy and huge market potential attracted his company here.

The company has set up a R&D lab in Tianjin and plans to build bigger R&D centers in China as market expands.

Kennametal would also continue to cooperate with leading Chinese universities on R&D, said the company's vice president William Y.Hsu.

TEDA lies in the heart of Binhai new area, which is a booming economic and development area highly promoted by the government in Tianjin.

Machinery manufacturing accounts for 10 to 26 percent of TEDA's total production value, said TEDA official Yang Zhongqiang, adding that new materials, energy and metal tooling will be priority areas they support.

Kennametal is world's leading supplier of milling and cutting tools, whose sales revenue in the fiscal year of 2006 reached 2.3 billion US dollars.Its business expanded rapidly in China since its entry in 1991.

Source: Xinhua