Zhongwang seeks to expand ties in Europe after being snubbed by US

After experiencing difficulties in the United States market, China’s aluminium extrusion giant China Zhongwang Holdings Ltd is eyeing the Chinese domestic market as well as the market in Europe to expand sales presence. So said the company’s managing director in an interview published on August 28.

As per Amada Xu Jing’s report to the South China Morning Post, the firm has had continual problems marketing to the United States because of initial tariffs on Chinese aluminium imports in addition to the late trade unpleasantness between the two countries.

Earlier, the firm used to generate a significant portion of its sales from the United States buyers, accounting for 42 per cent of the company total sales in 2009. But just in two years of time, it dropped to as low as 4 per cent, thanks to Washington’s countervailing duties on charges that the company was unfairly benefitting from state subsidies.

In 2015, the sales had reportedly risen a bit to between 8 per cent and 12 per cent because of a brisk business in aluminium-alloy pallets which were not subject to sanction but did not continue for long.
"It came to end in 2016, when a US policy review saw the net cast wider to cover the pallets,” she explained.

“Still, when our Tianjin factory, which makes high value-added rolled flat products, opened a year ago, it managed to sell some products to the US, but when a 10 per cent tariff was slapped on all Chinese aluminium products [in March this year], it became pretty unviable for us to continue.”

Posting results for the opening half of 2018, Zhongwang reported on August 24 that its net profit stood at US$184.65 million, up 0.5 percent compared to the corresponding period last year. The firm’s sales volume swelled 14.2 percent to a total of 325,096 tonnes. However, a 1.5-percent sliver of sales occurred to United States buyers, while German and Dutch buyers together accounted for 3.7 percent. Chinese buyers accounted for 88 percent of the firm’s revenue.