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China Zhongwang Earmarks Production Sites for Development of Three-million-tonne Aluminium Flat Rolled Products Project in Phases

2011-07-15 18:44

Synergistic Expansion of Industrial Aluminium Extrusion and Flat Rolled Businesses Running in Parallel to Foster New Growth Momentum

HONG KONG, July 15, 2011 /PRNewswire-Asia/ -- The world's second largest, and Asia's and China's top aluminum extrusion product developer and manufacturerChina Zhongwang Holdings Limited ("China Zhongwang" or the "Company", together with its subsidiaries the "Group"; HKEx stock code: 01333) announced new development progress for its new aluminium flat rolled business. The aluminium flat rolled products project, to be developed in phases and scheduled to commence production in 2014, will have a planned total capacity of approximately 3 million tonnes. It will rank China Zhongwang on top of the list globally by planned capacity and product positioning and is expected to form a new growth driver for the Group.

The Group has preliminary plans to develop the aluminium flat rolled products project in three cities, namely Tianjin, Panjin in Liaoning Province and Daqing in Heilongjiang Province.

Expansion towards High Value-added Industry Chain of Processed Aluminium Products

Mr. Liu Zhongtian, Chairman and President of China Zhongwang, said, "All along, China Zhongwang has been moving up the industry chain to high value-added processed aluminium products, first from construction to industrial aluminium extrusion products, now to aluminium flat rolled products and deep-processed aluminium finished goods which the Group has started exporting to the US. Focusing on high value-added products has been a key to fuel Zhongwang's rapid and solid growth. Compared to aluminium extrusion products, high-end flat rolled products require more advanced technology and in return offer higher profit margins compared to industrial aluminium extrusion products. Even more attractive is the enormous market potential. Entering this new business will leverage our existing technology edge and customer resources to generate new operational synergies with our existing aluminium extrusion business."

Large-scale Extrusion Presses to be Installed in 2011 and 2012 to Optimize Capacity

China Zhongwang's pace of expansion remained intact despite the adverse impact of the US anti-dumping and countervailing duties investigations ("US investigations") which led to a decline in export sales and profits. "The US investigations will not alter our production capacity expansion plan.  The introduction of advanced large-scale production equipment has been ongoing as planned. The Group is adding 18 large-scale extrusion presses, each with a pressing power at or above 75MN, including three globally advanced 125MN extrusion presses.  Recently, two sets of 75MN presses have completed installation and commenced production. These new facilities will be used for the production of high-end large-section industrial aluminium extrusion products that contribute to enhancing our product mix and increasing gross profit margins," remarked Mr. Lu Changqing, Executive Director and Vice President of China Zhongwang. 

2Q2011 Delivered Significant Quarter-on-quarter Improvements
Gradually Moving out of the US Investigations Trough

In response to the changes in the US export market, the Group has adjusted its strategy and deployed pro-active efforts to enlarge its market share in the Chinese domestic market and further develop its domestic customer base. These efforts yielded positive results. The China market has gradually become the Group's major profit stream and growth engine. According to the Group's unaudited management accounts, the Group recorded significant quarter-on-quarter improvements in overall sales volume and net profit for the three months from 1 April 2011 to 30 June 2011 as compared to the three months ended 31 March 2011.

China Zhongwang's strategy to strengthen its production capabilities with the introduction of advanced equipment, the development of high-end deep-processed industrial aluminium extrusion products via technological advancement, and intensifying marketing efforts to tap opportunities in both domestic and overseas markets have laid a solid ground for it to grow and prosper.  Going forward, China Zhongwang will leverage its financial strengths to embark on new expansion plans. "The aluminium flat rolled products project has earmarked production sites, marking a major milestone in our corporate development. The management team is confident of the promising future of our new developments and look forward to bringing fruitful rewards to shareholders and investors," Mr. Lu concluded.

About China Zhongwang Holdings Limited

China Zhongwang is the second largest aluminium extrusion product developer and manufacturer in the world and the biggest in Asia and China, primarily focusing on, among others, the light-weight development of transportation, machinery equipment and electric power engineering sectors. Headquartered in Liaoning province, China, the Group is specialized in the provision of quality industrial aluminium extrusion products which meet stringent specifications and quality standards.

The Group owned 75 world-leading aluminium extrusion production lines as at 30 June 2011, of which the 125MN oil-driven dual action aluminium extrusion press is one of the largest and most advanced presses in China and even in the world.  It has built the world's top aluminium tilt smelting and casting equipment in the industry, as well as the largest customized industrial aluminium extrusion product die design and manufacturing centre in Asia. The Group's annual production capacity as at 30 June 2011 was approximately 700 kilotons. The close coordination among product development, smelting and casting, die and extrusion and the advanced technologies applied in those processes are the Group's important source of competitiveness and outstanding feature.

The Group is principally engaged in the production of high precision, large-section and high value-added industrial aluminium extrusion products which are widely used in the transportation sector (including railway passenger and cargo carriages, metropolitan rails, automobiles, heavy trucks, vessels, aviation and aerospace) as well as machinery equipment and electric power engineering fields.

Source: China Zhongwang Holdings Limited

Related stocks: HongKong:1333

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