Annual Report 2010 - Scana Industrier ASA

18Annual Report 2010 Scana Industrier ASAManaging director: Johnny SjöströmLeshan Scana Machinery LtdLeshan Scana Machinery Co. was founded in 1998 and is a Norwegian-Chinese joint venture,where Scana Industrier ASA owns 80 %. Local authorities in China own the remaining 20 %.Leshan manufactures rolls for the steel industry andcast special products for the steel, energy, oil andgas, construction and shipping industry. Leshan is arespected supplier in the Chinese market and is amongthe leading in the Chinese roll manufacturing industry.The company has an annual capacity of 20,000 tonnesrolls and cast products.Leshan´s vision is to be a leading manufacturer of rolls.This strategy entails manufacturing niche productsof a high quality. Scana collaborates closely with thecustomers to develop existing and new products.Products and marketRolls are the company’s core product and are utilised byLeshan’s customers to make profile steel, hot materialsand plates. Chinas entire production of steel totals670 million tonnes, or roughly 50 % of the world’s totalproduction. The production is expected to increase tomore than 1,000 million tonnes towards 2020. LeshanScana is a strong brand and has world leading steelproducers on our client list.In spite of surplus capacity in the Chinese market,Leshan Scana has increased the order intake with anexcess of 300 %, compared to 2009. But substantialcompetition, plus increased energy and raw materialsprices, has lessened profitability. Towards the end of2010, Leshan Scana carried through cost reductionsand workforce downsizing to strengthen our competitivepower.Castings are mainly used in the power generation,petroleum, cement, construction and shippingindustries. Leshan Scana is certified according tointernational class companies like DNV, ABS, LRS, BV,GL, RINA and NK. Scana is an important supplier ofcast nodes and connectors to several large projects inChina, like the EXPO2010 in Shanghai and Bird’s NestStadium in Beijing, for the Olympic Games 2008.The sales ratio between rolls and castings is 85 % and15 %, respectively. Sales are largely generated fromthe domestic market, but some of the production isexported to India, Turkey, Malaysia and Taiwan. Throughcooperation with international partners, the goal is toincrease export sales considerably towards 2015.The company has adopted and implemented the “LeanProduction” philosophy to optimise production andreduce cost.Leshan Scana is completing a large investmentprogramme for a new production line for large rings.The project will be completed in 2011 and ensurethe company a leading role in this area as well. Thecompany will introduce new technology, improvetechnical skills, plus strengthen product and marketdevelopment.Change of directors at Leshan: Johnny Sjöstrom (at left) becomes newManaging Director at Leshan Scana. Ingvar Winbo, who works as managingdirector at Scana Steel Björneborg, has taken the role as new Chairman of theBoard for Leshan.The investment will also bring positive side effects,such as increasing the maximum weight of castings toa theoretical value of 50 tonnes, and the total meltingcapacity to over 100 tonnes. This will improve theflexibility.