Yangzhou Chengde Steel Tube Secures US$80 Million Investment from The Carlyle Group; Strategic Partnership Supports Growing Large-Diameter Seamless Pipe Supplier

Jiangsu, China – Yangzhou Chengde Steel Tube Co., Ltd. (Yangzhou Chengde), China’s leading private large-diameter seamless steel pipe manufacturer, announced today that The Carlyle Group (Carlyle) has become a strategic shareholder in the company through a US$80 million investment for a 49% stake. The transaction received all necessary regulatory approvals and was completed on March 29, 2007. Further financial details are not disclosed. The investment will support Yangzhou Chengde’s further growth in domestic and overseas markets. The investment was made by Carlyle Asia Partners II, a $1.8 billion fund that makes large control and strategic minority investments throughout non-Japan Asia.

Yangzhou Chengde supplies large-diameter seamless steel pipes to many industries including energy, power, heavy industrial, chemical and construction. It has a broad domestic and overseas clientele covering boilers, oil, chemical, petrochemical, ship building, gas cylinder, heavy machinery and steel pipe distribution companies.

Mr. Huai-De Zhang, Founder and Chairman of Yangzhou Chengde, said, "Carlyle is a global company that has invested in major industrial companies in the world. These networks and relationships will be a great source of potential partnerships and clientele for our company. In addition, we intend to partner with Carlyle to drive positive changes in areas such as operational efficiency, research and development, and corporate governance to strengthen our market position."

"We are impressed with Carlyle’s track record and commitment to creating value for its companies. In China Carlyle has demonstrated a deep understanding of local businesses and an ability to work well with Chinese companies. The Carlyle brand will also help attract senior management talent to help expand both our domestic and overseas business," added Zhang.

Yi Luo, Managing Director of Carlyle, said: "Yangzhou Chengde has a successful niche position in the industry and is well positioned to benefit from China’s continued industrialization and build-up of large-scale energy infrastructure. With its competitive cost structure, product quality and short production lead time, it can emerge as a formidable player in key overseas markets in the years ahead. We look forward to working with this dynamic company."
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