Russian-Chinese Project Regarded As “Vitally Important"

Fri, 05/29/2015

On May 20, 2015 Vitaly Machitski, Board Director of Vimetco, met with Xie Fuzhan, the Governor of Henan province in China.

Vimetco operates high-tech facilities in Henan cities of Gongyi and Linzhou, producing rolled aluminum alloy products. Its electrolytic, casting and rolling facilities have total capacity of nearly two million tpa of aluminum and aluminum products, while proprietary power generating facilities have capacity of over 2,000 MW. Both industrial clusters have been developed during the last 9 years on the territory of 150 ha of land set aside.

Hi-tech integrated industrial complex developed by Vimetco, including proprietary coal mines with the reserves of over 150 mln. tons, is the largest Vimetco investment into Chinese economy, exceeding $3.3 bln. It is also a rare example where large-scale aluminum production, power generation and coal mining have been merged together.

Despite a weak current aluminum market in China, as well as, indeed, in the whole World, Vimetco, being a majority owner of Chinese Henan Yulian Energy Group Co., Ltd. and listed Henan Zhongfu Industrial Co. – besides already commissioned mills – is completing construction of a modern mill to produce 600,000 tpa of high precision cold and 400,000 tpa of hot rolled aluminum alloy products, which will be fully commissioned in October this year. Investments into the Project amount to $1bln. Rolling facilities commissioned at the first stage of the Project already now produce a wide range of products: from foil and aluminum cans through auto and aviation plates.

Vimetco project in China, which is close to completion, has encountered problems, related to the current situation in the global markets. In these circumstances, the support for this significant project provided by the Chinese governmental authorities turned out to be invaluable; they regard Vimetco high tech project as a model for the global listed corporation investment cooperation. Administrative and structural support of the country and Henan provinces governments contribute to this major project of private investments in China’s economy.

China’s State Science and Technology Committee has put Vimetco Project on the list of the most innovative projects in the country.

Signals to provide most favorable conditions have been relayed to the level of the regional authorities, where the business practice is essentially forming up. This became evident during the meeting between Vitaly Machitski and Henan province Governor Xie Fuzhan.

The meeting took place in the Governor’s residence, and was followed by the dinner given by the Governor in honor of the Vimetco Board Director. The discussions at the meeting turned out to be business-like and interesting. The Governor assured the Russian businessman, that Vimetco extraordinary project is vitally important for the economic and social development of the region both in terms of its scale and its technological level, and has been included in the plan of the economic development of Henan province. One way or another, over 200,000 Henan citizens are related to the project, besides those 16,000 directly employed by the Group. The project itself, having been awarded a status of the most advanced one in the area of innovations by the China’s State Committee on Science and Technologies, serves as the industry pattern for other Chinese enterprises. In these conditions – said Xie Fuzhan – the province authorities will do everything possible under the current legislation to ensure stable and dynamic development of the project.

The Shanghai Stock Exchange instantly responded to the information about the past meeting – quotes of Henan Zhongfu Industrial Co., controlled by Vi Holding Group, went up by almost 10%, increasing company capitalization to $2.7 bln.

Note:Henan is a province in the East of the central part of China. Administrative center and the largest city – Zhengzhou. Population – 94,023,567 (2nd among Chinese provinces in 2010). Total area of the province – 166,330 km2, equals to the area of France.