On December 28th, the result of the fifth annual ‘China Aluminium Industry Top 100’ was announced. China Zhongwang was selected for its outstanding performance.
Outstanding Financial Results
The selection of the ‘Top Ten Industrial Aluminium Enterprises in China’ this year was conducted in a fair, just and open manner. Unlike the prior four years, this year the results were evaluated on corporate financial figures and corporate strength. The selection clearly pictured the development of China aluminium industry.
2012 was a year full of challenges and opportunities for the China aluminium industry. China has developed as the driving force of the global aluminium market. In spite of the slowing global economic growth adversely affecting scores of Chinese corporations, a few of them thrived on their sound modus operandi.
Committed to developing high-end aluminium extrusion products, China Zhongwang achieved outstanding performance in the first three quarters in 2012. Revenue and profit for shareholders of the company in the period increased by 57.4% to RMB 10.74 billion and by 108.4% to RMB 1.39 billion, and overall gross profit margin rose 1.5 percentage points to 21.4%. Total sales volume grew 57.7% to 474 kilotonnes, of which the China market increased 49.5% to RMB 9.92 billion over the same period of last year.
Vibrant Market Demand
Light-weight development aiming at energy conservation, discharge reduction and low carbon emissions is an irreversible global trend. Due to its light-weight substance, strong performance in corrosion resistance, electric conduction and heat transfer and recyclability, market applications and demand for aluminium alloy are growing, meanwhile, government policies also support the widespread use of aluminium.
Data shows that China drives the aluminium consumption all over the world. From 2007 to 2011, the compound annual growth rate for aluminium consumption was 17%, while that for aluminium flat rolled products was roughly 13%, which was well above other countries’ growth rates of 3.2% and 3.1% respectively. It is expected that the consumption of industrial aluminium extrusion products will keep increasing together with the development of the industry. The aluminium flat rolled products market is still in a fledging period, mainly relying on imports to satisfy market needs. The markets of aluminium sheets, aluminium strips and aluminium foils are yet to be developed. The consumption of the products is apparently lower than the global level. Hence, there is huge potential for the market.
China Zhongwang has been focused on the lightweight development in the transportation, machinery and power engineering industry, and has leveraged its advantages in the industrial aluminium extrusion products industry to expand the markets of aluminium deep-processed products and aluminium flat rolled products and establish a preliminary business structure with three resource sharing and complementary core businesses.
Market Pioneer
In terms of aluminium processing production facilities and R & D technology, China Zhongwang assumes a global leading position. As the world’s second-largest industrial aluminium extrusion product developer and manufacturer and the largest one in China and Asia, China Zhongwang continues to increase its production capability. Following the introduction of the first 125MN oil-driven dual-action extrusion press in 2009, the Group added 18 large extrusion presses of 75MN or above, including nine 75MN, six 90MN and three 125MN extrusion presses from 2011 to 2012. For the global distribution of large extrusion presses of 75MN or above, China Zhongwang has been at the industry forefront in terms of volume and capacity. There are only 26 in total in the whole nation and less than 10 in overseas markets, while China Zhongwang owns 21 of such large scale extrusion presses. Moreover, China Zhongwang has placed orders for two sets of the world’s largest single-action horizontal aluminium extrusion presses with their core components from Germany this year.
Being the only aluminium processing company in Liaoning endowed with ‘National-Recognised Enterprise Technology Centre’, China Zhongwang is equipped with advanced scientific research center worth RMB 112 million, 6 research laboratories, 22 analytical laboratories and 5 innovative teams. The Company also achieved outstanding techonogy results in China Torch Program, the State 863 Project, etc., and received various international accreditations in multiple industries, such as railway, automobiles, shipping and aviation. For example, Det Norske Veritas, the IRIS certificate, the EN15085 certificate, and the TS16949 certificate, etc.
Robust Profit Growth
In 2002, China Zhongwang changed its market strategy to industrial aluminium from construction aluminium products. The year 2009 marked a major milestone in the Company’s corporate development when shares of China Zhongwang listed on the main board of the Stock Exchange of Hong Kong Limited and became the largest IPO of the global capital market on record. In 2011, the company strived to expand into aluminium flat rolled products and deep-processed products businesses in a way to enhance its core competiveness.
There are four key production stages in the industrial aluminium, namely “the integration of smelting and casting”, "die design", "extrusion equipment" and "product R&D". China Zhongwang is the only enterprise which covers the whole production chain of industrial aluminium extrusion products under the same roof.
Built on its edges in industrial aluminium extrusion industry, China Zhongwang has commenced the development of the aluminium flat rolled business with a total investment of RMB 46.6 billion. Phase 1 of the project, with an annual capacity of 1.8 million tonnes of aluminium flat rolled products, is to commence production in the second half of 2014, while the total planned annual capacity of 3 million tonnes will be achieved by the end of 2018. At the moment, the company has already ordered facilities worth 3.8 billion dollars. The development of the factory in Tianjin has just begun, as well as the recruitment of overseas industry talents.
Deep-processing of industrial aluminium extrusion products helps the Group to expand its product mix and production scale, and to strengthen profit capability and global competiveness. Since deep-processing plant was built in 2011, China Zhongwang has set up a technology team and purchased advanced overseas equipment. Due to the high value-added and technical content features, the aluminium flat rolled products and deep-processing products business is expected to become long-term profit growth engines after commencing full operation.
