Zhongwang to sell loss-making smelter for $656 mln

One of the world's biggest manufacturers of aluminium extrusions China Zhongwang Holdings recently said that it would sell its smelting operations for CNY 4.6 billion (USD 656 million) as high power costs make the business unprofitable. Zhongwang has agreed to sell its 100% stake in Zhongwang Aluminium Material, the unit that holds its 800,000 tonnes per year of primary aluminium smelting capacity in China's northeastern Liaoning province, to Henan-based Yidian Luoyang. Zhongwang said“Due to the high production costs including costs of electricity, the electrolytic aluminium business has been loss-making in recent years. Unit had recorded net losses in excess of CNY 800 million in both 2018 and 2019.

It added “The business doesn't conform to the group's development strategy and cannot make enough profit contributions to our sustainable growth.”

The company will continue to source primary aluminium from other smelters for its core business of making extrusions and other aluminium products.

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