Downstream Products News - Market

China Hongqiao Group to invest $1.6 billion to expand its downstream business

AL Circle

As reported by Reuters, China Hongqiao Group Ltd is said it will invest $1.6 billion to buy two aluminium processing firms in order to expand its operation in the value added segment.

After a series of transactions, the world’s biggest aluminium smelter would own majority stake in the Loften Environmental Technology Co. Ltd., an aluminium foil producer, as confirmed by a statement to the Hong Kong Stock Exchange on Tuesday. Hongqiao already agreed to buy 28% stake of Loften for about $131 million in August 2016. The new deal would raise the stake to 74% at an additional cost of 10 billion yuan.

News
According to the statement, Loften’s increase in value from August comes from its own purchase of aluminium alloy processor Shandong Innovative Metal Technology Co. and Binzhou Hengwang Shareholding Management Corp., in a separate deal worth 7 billion yuan.

As told by a Hongqiao spokesperson the acquisitions “will play a very important role in enhancing the group’s position in the area of aluminium deep processing through industrial integration and also bring positive impact to the group’s production and operation.”

{googleAdsense}

“Hongqiao has a strategy to focus on expanding its downstream business and this is in line with that strategy,” said Wan Ling, aluminium analyst at CRU Group in Beijing.

Hongqiao is the main supplier of liquid aluminium to Innovative Metal, based in Zouping, the same northern city as Hongqiao, which is the biggest producer of aluminium alloy billet in China.

Notably, recently, some anonymous claims have been made on the Hongqiao’s exposed website, which question the firm’s cash flow, debt load, undisclosed related-party transactions and its environmental record. Hongqiao said the firm is preparing an announcement to rebut and clarify the alleged claims.

The aluminium firm’s shares fell as much as 2.5 % in Hong Kong after the anonymous report was floated. Loften, whose shares are now suspended also announced its plan to make asset purchases of up to 10 billion yuan.

Edited By:


This news is also available on our App 'AlCircle News' Android | iOS


Alternate Text
EPIQ Machinery

A world class equipment designer specialized in developing innovative & effective solutions for heavy equipment, vehicles, and material handling systems

Alternate Text
RIA Cast House Engineering

Leading supplier of rail mounted precision Furnace Charging Machines and Furnace Skimming Machines

Alternate Text
Altek

Leading manufacturer of value-added equipment for the aluminum casthouse

Alternate Text
Jagannath Company

Manufacturers & Supplier of Magnesium Metal and Aluminium Foundry Chemicals

Alternate Text
CETAG

A supplier of proven systems and an expert adviser in aluminum casthouse technology, offering its services worldwide to the aluminum industry.

Related
Business Leads
Interested to buy aluminium ubc scrap. Destination : India ...
22-Mar-2024 Buying request

Interested to buy aluminium scrap. Destination : India
22-Mar-2024 Buying request

Interested to buy aluminium ingot LM25 on monthly basis. De...
22-Mar-2024 Buying request

Read this news article and much
more on the AL News app
Get real-time news and business
lead alerts on your phone
SUBSCRIBE NOW
Market

Market

Project

Project

Technology

Technology

Leads

Leads