Sapa Corporation, the world's largest aluminum profile producer, is making every effort to overcome the possibility of being surpassed by China Zhongwang, currently ranked second in the world.
This company has partnered with China Aluminum Corporation, the largest producer of alumina and electrolytic aluminum in China. Aluminum Corporation of China announced yesterday that it will form a joint venture with Sapa to produce aluminum extruded materials. Both parties hold a 50% stake in the joint venture.
Before the emergence of Zhongwang in China, only a few large companies in the global market, such as Sapa from Sweden, Hydro Industries from Norway, and Alcoa from the United States, could produce industrial aluminum profiles on a large scale.
Last year, China Zhongwang Aluminum Profile had a production capacity of 600000 tons, accounting for 6.2% of the global market share, surpassing Alcoa and Norway's Hydro to become the world's second-largest industrial aluminum profile manufacturer, second only to Sapa Corporation.
In 2009, in terms of industrial aluminum profiles, Sapa Company sold 527000 tons, China Zhongwang sold 370000 tons, and Hydro sold 298000 tons.
At the end of last year, China Zhongwang purchased more than 20 large tonnage machines, with the smallest being over 9000 tons and the largest being 30000 tons. With the arrival of the machines, the production capacity will also be greatly improved. By 2015, the company expects its production capacity to reach 1.2 million tons, becoming a global leader.
Faced with the strong upward trend of Zhongwang in China, Sapa Company has to find ways to squeeze its competitors. On April 21st of this year, the US Department of Commerce announced that it had decided to launch an anti-dumping and anti subsidy investigation into aluminum profiles imported from China. The filing was initiated by the US Steel Union and the Aluminum Fair Trade Commission.
Insiders revealed that the behind the scenes manipulators of the US "double reverse" investigation into Chinese aluminum profiles are several companies, including aluminum profile giant Sapa Group from Sweden.
At the same time, Sapa also fully utilized the game rules to lobby Chinese companies to cooperate with them, in order to expand their market share in China as much as possible and achieve a dual suppression of China Zhongwang.
In the first quarter of this year, China Zhongwang achieved a net profit of 1.312 billion yuan, a year-on-year increase of 65.1%. Last year, benefiting from the increasing demand in the aluminum profile market and the rapid growth of export business, this company achieved a net profit of 3.528 billion yuan, a year-on-year increase of 84.7%.
In the previous three years, China Zhongwang's net profits reached 551 million yuan, 852 million yuan, and 1.91 billion yuan respectively, with a compound annual growth rate of 86%.
China Aluminum Corporation stated that both parties aim to reach a cooperation agreement and establish production facilities in the fourth quarter of this year, and strive to launch products on the market in the first quarter of 2011.
And China Zhongwang is not showing weakness. In February of this year, China Zhongwang announced plans to acquire its largest domestic competitor, Qinghai Guoxin Aluminum Industry Co., Ltd.