HARRISBURG, Pa., Dec. 9, 2010 (GLOBE NEWSWIRE) -- Worldwide industrial services and engineered products company Harsco Corporation (NYSE:HSC) and China's Taiyuan Iron & Steel (Group) Co, Ltd. (TISCO) announced today the establishment of a new 25-year joint venture relationship that will effectively address the environmentally beneficial processing and metal recovery of TISCO's stainless and carbon steel slag production by-products across a range of potential commercial applications.
The 25-year partnership, recognized recently by both parties at ceremonies held in China, is the largest joint venture in either company's history. Harsco anticipates that the joint venture has the potential to generate new revenues of an estimated $30 million per year initially, ramping up to a projected run rate of approximately $50 million to $60 million per year when fully operational. Harsco and TISCO will respectively share a 60%-40% relationship in the partnership and have agreed to jointly commit capital estimated to be in the area of a 1-to-1 ratio to the projected revenues. Harsco will fully consolidate the results of the joint venture in its financial statements.
While the joint venture agreement has been executed, the parties still must reach final accord on the definitive agreements with respect to operations, technology licensing and land leasing, as well as obtain final Chinese government approval. The Company expects that these matters will be completed in the first half of 2011 and that the joint venture will commence operations in early 2012.
"This is a landmark step in Harsco's continuing evolution as a comprehensive environmental solutions provider to the steel and metals industries," said Salvatore D. Fazzolari, Chairman, President and CEO of Harsco Corporation. "We are embarking as dedicated joint partners on a major journey that has enormous potential for long-term collaboration, innovation and benefit, both to our partnership and to the greater environment throughout this region of China."
Mr. Li, Xiaobo, Chairman of TISCO said, "I share fully with Mr. Fazzolari's vision for the project. Our relationship will help TISCO achieve its goal of zero waste discharge and in building itself into a model business among all steel makers in China in protecting the environment and contributing to the building of a truly and totally recycled economy. Harsco is a great company and TISCO is looking forward to a long-term cooperation with Harsco." With annual stainless production in excess of two million tons, TISCO moved up to become the world's largest producer of stainless flat products in 2009, the first Chinese company in history to hold the top ranking.
The partnership follows two years of detailed analysis undertaken by both parties following an initial Letter of Intent announcement in November 2008. Once the definitive agreements are concluded and the joint venture is fully operational, the new joint venture company, to be known as TISCO Harsco Environmental Protection Enterprise Co. Ltd., is expected to process as much as 1 million tons of stainless steel slag and up to 500,000 tons of carbon steel slag per year. The joint venture company plans to market these materials for "zero waste" commercial re-use in such applications as metallurgical additives, recyclable stainless steel scrap, agricultural and turf fertilizer, and a range of roadmaking and construction materials. Harsco has established itself as an industry pioneer in developing and deploying responsible environmental solutions for industrial by-product materials, including, for example, Harsco's emerging specialty soil conditioner product line which has demonstrated significant yield improvements in corn, rice and other major crops in the range of 10-25 percent in actual field trials, including India, China, and Brazil.
This announcement contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected revenues and expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "may," "could," "believes," "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Harsco, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, changes in the worldwide business environment in which the Company operates, including general economic conditions; changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; changes in the performance of the equity and debt markets that could affect, among other things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses; changes in governmental laws and regulations, including environmental, tax and import tariff standards; market and competitive changes, including pricing pressures, market demand and acceptance for new products, services, and technologies; unforeseen business disruptions in one or more of the many countries in which the Company operates due to political instability, civil disobedience, armed hostilities, public health issues or other calamities; the seasonal nature of the Company's business; our ability to successfully enter into new contracts and complete new acquisitions or joint ventures in the timeframe contemplated or at all; the ongoing global financial and credit crisis, which could result in our customers curtailing development projects, construction, production and capital expenditures, which, in turn, could reduce the demand for our products and services and, accordingly, our sales, margins and profitability; the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; the successful integration of the Company's strategic acquisitions; the amount and timing of repurchases of the Company's common stock, if any; our ability to successfully implement cost-reduction initiatives; the ability of the Company to enter into the definitive agreements necessary to commence operations under the joint venture described in this announcement; the Company's ability to obtain approval of the joint venture from the Chinese government; and other risk factors listed from time to time in the Company's SEC reports. The Company undertakes no duty to update forward-looking statements.
Harsco Corporation is one of the world's leading diversified industrial services and engineered products companies, serving key industries that play a fundamental role in worldwide economic growth. Harsco's common stock is a component of the S&P MidCap 400 Index and the Russell 1000 Index. Additional information can be found at www.harsco.com.
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