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Xingfa on its mettle
Xingfa Aluminium Holdings (0098) is seeking
overseas market opportunities, while concentrating development in the
mainland market.
The Guangdong-based manufacturer said its products can be generally
categorized into aluminum profiles with surface finishing and plain
aluminum profiles.
Its aluminum profiles with surface finishing can be further classified
into anodized aluminum profiles, electrophoresis coating aluminum
profiles, powder coating aluminum profiles and Polyvinylidene Fluoride or
PVDF coating aluminum profiles, which are generally applied as
construction materials.
Since 2000, the company has been developing high-end aluminum doors and
windows such as the 2000 series of patented novel sealed sliding windows,
the 2005 series of energy- saving polyurethane sliding windows, the 70B
series of injected thermal break single-sash lift windows and the new
Winger series.
Its aluminum profiles are being and have been used in projects
including the construction of the Olympic Village, China World Trade
Center Tower 3 in Beijing and the renovation of the Great Hall of the
People in Beijing.
Executive director Wang Zhihua said the company is also developing
high-end aluminum profile products which are suitable for aviation,
including rockets.
Xingfa said it was named top aluminum enterprise by the China Non-
Ferrous Metals Fabrication Industrial Association in 2003 and again in
February this year.
Xingfas aluminum profiles are primarily made from aluminum ingots, accounting for 90 percent of cost of
sales.
Because of the energy crunch in recent years, there is a worldwide
shortage of aluminum profiles.
Spot aluminum price in 2002 was 13,000 yuan (HK$14,300) per tonne, but
it soared to 19,000 yuan per tonne in 2006, according to the Shanghai
Futures Exchange. Even though the cost of aluminum ingots is surging,
Xingfa insisted it will not be a big burden for the company.
Chief executive officer Luo Riming said the company can shift the cost
burden to its customers as it is constantly adjusting its retail prices.
Geographical advantages will also help cut costs as Xingfas
headquarters and production bases are located in Foshan, Guangdong
province, which is the largest production base of aluminum profiles.
Many of its customers are nearby, and they can benefit from having
their orders met within a single day at the latest price.
Also, the close proximity to such buyers allows the firm to have a
better gauge of demand and only stock up on raw materials that are needed
in the short term, leading to lower inventory and production costs.
About 80-90 percent of Xingfas total revenue is derived from the
mainland. The companys future plans include entering the Middle East
market, and strengthening its market position within China.
Now, mainland austerity measures are aimed at curbing the property
market, said Wang. But our business is also related to railway business
and urban construction.
In future, construction in new rural areas and second-tier cities can
hopefully bring much room for development for the companys business.
Xingfa already has a footprint in the Middle East as it has provided
aluminum profiles for the Burj Tower project in Dubai.
The tower will be completed this year at a cost of US$1 billion (HK$7.8
billion), and is expected to overtake Taipei 101 in Taiwan as the tallest
building in the world.
Chief financial officer Wong Siu-ki said the companys product quality
was the key to its success.
Products in the aluminum industry are ever-changing. The structure of
aluminum profiles can be changed to overtake other products if technology
allows, said Luo.
The company has national level laboratories, and is cooperating with
Tsinghua University to develop the use of aluminum profiles.
He added: Concentrating on technology advancement to sell something
different is a way of [moving] into the high-end market. 2008-04-26 |
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