Dongxing Aluminium's strategic moves boost revenue through smart buying and selling

Amid shifting market dynamics and a tempered macro outlook this year, Dongxing Aluminium has harnessed the power of proactive tactics. With its "three grasps and three promotions" strategy as a cornerstone, the company has focused on maximizing gains while minimizing costs.

This dual-pronged approach, centred on elevated marketing efforts and streamlined procurement strategies, has yielded promising results, enhancing operational efficiency and profitability.

Dongxing Aluminium's efforts exemplify a thriving synergy between smart procurement, strategic selling, and value-driven waste management, underscoring their commitment to elevating their financial prowess in a dynamic market landscape.

The company's market analysis has guided its purchasing decisions, aligning them with price fluctuations. The firm opted for strategic long-term purchasing during the first quarter's alumina price hike. As prices tapered and freight costs dropped by RMB 58/tonne in the subsequent quarter, spot purchases surged, saving RMB 20.9 million in procurement expenses. Likewise, the procurement department's moves with anode carbon blocks saved over RMB 14 million through cost-efficient sourcing and quality improvements.

Sales efficiency also saw a significant boost, driven by a targeted focus on maximizing molten aluminium sales volume. This concerted effort, coupled with enhanced interdepartmental coordination, optimized product structures and reduced casting ingot costs by RMB 15.83 million. Meanwhile, Dongxing Aluminium skilfully balanced aluminium ingot sales to meet market demand while cutting freight costs by RMB 26.63 million.

Focusing on sales efficiency, the company prioritized maximizing molten aluminium sales volume. Through meticulous coordination across all parties, they consistently fine-tuned the product structure. This commitment was reinforced by robust contract execution, fostering better inter-departmental connectivity and enhancing distribution service quality.

Over the year's first half, molten aluminium sales surged by an impressive 105,500 tonnes year-on-year. This increase slashed casting ingot costs by RMB 15.83 million and ensured a steady supply of aluminium ingots to Dongxing Jiayu Company. The company aligned their ingot sales with market trends to optimize resource allocation. They strategically balanced current and ongoing sales models, ensuring seamless monthly production and sales achievements.

However, on the export front, the first half of the year witnessed a decline in aluminium ingot exports, registering 92,100 tonnes, a stark drop of 103.16 per cent compared to the previous year. Despite this, their strategy led to a reduction of RMB 26.63 million in freight costs.

Addressing waste material management, the company harnessed the latent value within the solid and hazardous waste. The timely disposal of 25,500 tonnes of electrolyte and shell surface blocks led to a substantial revenue boost of RMB 170 million. Also, the exploration of hazardous waste like charcoal slag was transformed from a cost to an active source of income, yielding an additional RMB 10.4 million.

Centralized disposal of a backlogged 2,600 tonnes of scrap steel further streamlined operations. In the year's initial half, 100,700 tonnes of waste materials found purposeful reutilization, representing a noteworthy year-on-year uptick of 7.8 per cent. This translated to a sales revenue surge of 448 million yuan, marking an impressive 45 per cent increase from the previous year. These steps significantly contributed to the company's overarching objective of maintaining "steady growth."