MOSCOW - Saturday, November 8th 2014 [ME NewsWire]
(BUSINESS WIRE)-- Vi Holding plans to complete construction and fully start up the vertically integrated Yulian complex in Henan province for hot and cold rolling of aluminum alloys, with capacity for 600,000 tonnes and 400,000 tonnes respectively, in the second half of 2015.
Launch of the Yulian facility will mark the concluding phase of the project to create a group of enterprises for high level aluminum processing in China that Vi Holding began in 2006. Overall investment now totals $3.3 billion, including $1.2 billion provided by shareholders, with the rest financed with Chinese bank loans and reinvested earnings.
Speaking at an intergovernmental meeting in Sochi in October, Vice Premier Wang Yang said that there had never been a comparable Russian-implemented investment project in China.
When it has started up, the Yulian complex will hold a 20% share of the Chinese market for aluminum production in a host of high-tech segments - the largest in the world, Group Founder and President Vitaliy Machitski said.
Vi Holding's Chinese complex currently has capacity to produce about 800,000 tonnes of highly refined aluminum, including 600,000 tonnes of hot roll, 60,000 tonnes of flat products and 150,000 tonnes of anodes. It has capacity to produce 750,000 tonnes of primary aluminum for refining and 420,000 tonnes of castings.
A vertically integrated production complex has been created, including coal production, electricity generation, output of prebaked anodes, electric aluminum and alloys, and high level processing of primary aluminum into high-tech products. The Yulian complex is not an aluminum smelter, but rather a facility for producing high-tech products from aluminum, Vi Holding management said.
Electricity is supplied from power plants with 1,500 megawatts of combined capacity, the fuel for which is supplied from nine nearby company-owned mines with 150 million tonnes of proven reserves. Vi Holding employs about 16,000 people in China.
The complex is located in two industrial parks, in the cities of Gongyi and Linzhou. It is part of Henan Yulian Energy Group, which is 97% owned by Vimetco, which in turn is controlled by Vi Holding.
Vi Holding, which until now had developed the project without any state support, expects to receive support from the Chinese authorities under China's policy of stimulating creation of high-tech integrated production.
Vi Holding management said the project will reduce the Chinese market's reliance on imports in a host of segments: materials for aluminum cans, lithographic sheet (CTP, CNCP), billets for high-tech foil, aluminum sheet for the automotive industry and other products requiring high-precision alloys.
“The Yulian investment project is included on the list of the 500 best high-tech enterprises in China,” said Zhang Deguang, the board chairman of the China Foundation of International Studies. “This will serve as a worthy example for future expansion of our cooperation,” he said.
At the intergovernmental meeting in Sochi, Wang said the Chinese authorities “are studying the topic of conversation with the Russian side concerning the Vi Holding project” and will seek a solution to the problems that metallurgical enterprises in China are encountering.
Yulian received the status of a joint venture with participation of foreign capital even before the arrival of Vi Holding: in 2003, Oriental Patron, a company controlled by Hong Kong investors Zhang Gao Bo and Zhang Zhi Ping, invested in company shares. Vi Holding joined the project in 2006. Oriental Patron currently has a 10% stake in Vimetco.
In addition to its investment in the aluminum sector, Vi Holding is engaged in developing the Darwendale platinum deposit in Zimbabwe, one of the biggest platinum deposits in the world. It also has property development projects in Moscow.
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