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Release: September 17, 1996

NGK ESTABLISHED A PRODUCTION COMPANY OF INSULATORS USED FOR ULTRA-HIGH-VOLTAGE TRANSMISSION LINES IN CHINA

NGK Insulators, Ltd. (President: Masaharu Shibata, Head Office: Nagoya) agreed to establish a production company of insulators used for ultra-high- voltage transmission(UHV) line in china, jointly with Itochu Co. (President: Minoru Murohushi, Head Office: Minato-ku, Tokyo) and Tangshan High Voltage Insulator Works (President: Han Jintai, Head Office: Tangshan, China) in December, 1996.

The construction of the plant will started in March, 1997. The operation and the sale will take place in October, 1998.

The signing ceremony will be held at Great Hall of the People on September 23rd, 1996. Hebei Provincial Governor, Tangshan Mayor, the prominent persons from the National People's Congress Standing Committee and the senior management of the Ministry of Electric Power are supposed to attend the ceremony.

New Company Information

Name: NGK Insulators Tangshan Co., Ltd. (provisional)
Establishment: December, 1996 (scheduled)
Location: Tangshan New & Hi Technology Development Zone, Hebei, China
Paid in Capital: U.S. $25 million
Equity Owners: NGK 76% Itochu 19%
Tangshan High Voltage Insulator Works 5%
Chairman: Shoji Kobayashi (part-time)
Executive Managing Director
NGK Insulators, Ltd.
President: Kenji Morita (full-time)
Director
NGK Insulators, Ltd
Product: insulators for UHV transmission lines
Objectives(as of 1999): production output:1.8 million units / year
sales income: Y 3 billion / year
Investment in plant: approx. Y 2.2 billion
(plottage: 50,000 square mater / building site: 20,000square metre)
Employees: approx. 400 (as of 1999)

Background

NGK has exhibited the world's No. 1 production and market share of insulators used for UHV transmission lines. Toward the 21st century, the total capacity of power stations in China is scheduled to be developed by 20 million kw per year, while UHV transmission lines are planned to be extended by 3,000 km per year. In accordance with these developments in China, significant demand for insulators is expected.

For example, there is a project to construct UHV transmission line of 9,000 km from the Yanzijiang Sanxie Dam, whose capacity is 18 million kw. In order to achieve this project, the National People's Congress Standing Committee started the company managing transmission projects in China in June with equivalent Japanese yen of 30 billion and it is planning to construct a main transmission line from the Sanxie Dam and a network which connects the five big electric power administrations.

To maintain stable power supply, high quality is required for the insulators used for UHV transmission lines. In response to such demands, NGK has been strongly requested to get into the Chinese market by the National People's Congress Standing Committee and power industry section in China since 1984. The new tripartite joint venture was established to meet such requirements and also it aims to become a production center, which can be operated by low cost to supply products to the third country.

NGK appreciated the result of the feasibility study and the positive business induction as well as the favorable proposal offered by the Hebei government as a whole. Therefore, NGK decided to construct a new plant in Tangshan New & Hi Technology Development Zone in Hebei, which is the center of ceramic production in northern part of China.

NGK proceeds with its project by 2 steps. At the first step, NGK will establish a manufacturing plant for suspension insulators. At the second step, it is planning to establish a manufacturing plant for bushing shells and support insulators. The demand for insulators used at UHV substations is expected to grow in accordance with the Japanese and European heavy electric manufacturers' coming to China.

NGK has already established a production company for ceramic insulators in the U.S. , Europe, and Indonesia, and it ensures the Chinese plant one of its leading overseas plants.


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