【ferro-alloys.com】

  A few days ago, a news on the official website of China Baowu iron and Steel Group Co., Ltd. (hereinafter referred to as "China Baowu") attracted market attention. According to the news, on April 21, Hong Ning, strategic consultant of China Zhongwang Holding Co., Ltd. (hereinafter referred to as "China Zhongwang") and Lu Changqing, chairman and President of the company, visited Baowu. They had in-depth discussions and exchanges with Zou Jixin, member of the Standing Committee of the Party committee of Baowu, Secretary of the Party committee and chairman of Baosteel on strategic coordination, equity cooperation, management and control mode and smart factory.

  China Baowu and China Zhongwang are the world's largest iron and Steel Group and the world's second largest industrial aluminum extrusion enterprise respectively. The high-level meeting between them is enough to arouse market expectations.

  China Baowu is a joint venture of Baosteel Group Co., Ltd. and Wuhan Iron and steel (Group) Co., Ltd. with assets of over 860 billion yuan, it is a pilot enterprise of state-owned capital investment company and the largest and most modern iron and steel complex in China. China's Baowu crude steel output was about 115 million tons last year, surpassing ArcelorMittal, which ranked first for many years, and ranking among the world's largest steel group in scale.

  Founded in 1993, Zhongwang is the world's second largest industrial aluminum extrusion product R & D manufacturer in Asia, as well as the main supplier of aluminum extrusion materials for high-speed railway "Fuxing" vehicle body and domestic new energy vehicle body. The company has formed the development pattern of industrial aluminum extrusion, aluminum calendering and deep processing. The products are widely used in rail transit, new energy vehicles, ships, aerospace and other fields.

  The cooperation potential of these two leading enterprises may be concentrated in the field of new materials represented by aluminum. In 2019, China Baowu put forward the strategic idea of "one base and five yuan", that is, based on the iron and steel manufacturing industry, new material industry, intelligent service industry, resource and environment industry, industrial park industry and industrial finance industry develop in coordination. Among them, the "new materials industry" sector focuses on the development of advanced manufacturing industry and the needs of large countries' heavy equipment, focusing on promoting the industrialization of magnesium, aluminum, titanium and other light metal materials, special metallurgical materials, metal packaging materials and carbon based, silicon-based and other inorganic non-metallic materials needed in new energy, marine engineering, aerospace and other fields, so as to enhance the differentiated competitive advantage in the field of high-performance metal materials. To this end, China Baowu officially established the new material industry development center in January 2019, focusing on the development of new material industry that meets the national strategic needs, has high growth potential and profitability, and creates the second largest manufacturing industry plate of China Baowu with global competitiveness. It is also this sector that intersects with Zhongwang's business scope.

  China Zhongwang has been deeply engaged in aluminum processing for nearly 30 years. According to its public information, Zhongwang has not only established Asia's largest industrial aluminum extrusion die design and manufacturing center, but also has 712 patents in the field of aluminum processing (data as of the end of 2020). It has been widely used in the field of aluminum extrusion materials for high-speed rail vehicle bodies, aluminum extrusion materials for high-speed rail vehicles, aluminum extrusion materials for high-speed rail vehicles, aluminum extrusion materials for high-speed rail vehicles, aluminum extrusion materials for The domestic market share of new energy vehicle aluminum alloy body and other fields has an absolute leading advantage. Tianjin Zhongwang, its wholly-owned subsidiary, is the world's largest aluminum calendering production base with the most advanced equipment configuration and the highest degree of automation. Its high value-added aluminum calendering products have been widely used in industrial materials, aerospace, shipbuilding, rail transit, new energy vehicles, semiconductor and other fields. In recent years, China Zhongwang has also actively laid out the new energy vehicle market, realized in-depth cooperation with a number of mainstream automobile manufacturers at home and abroad, and provided them with automotive aluminum plate, deep-processing products and even a package of lightweight solutions.

  China Zhongwang is also one of the few representatives of Chinese enterprises that can truly participate in global competition and have core competitiveness in the field of aluminum processing. In 2017, China Zhongwang announced its US $2.33 billion acquisition of Aleris aluminum, which was also the largest overseas acquisition of China's aluminum processing enterprises at that time. If the acquisition is successful, Zhongwang will become the largest aluminum sheet supplier of Airbus and the third largest aluminum sheet supplier of Boeing, profoundly changing the world aluminum processing industry pattern. Unfortunately, under the joint obstruction of the US government and competitors represented by Alcoa, the transaction was forced to terminate. However, China Zhongwang did not stop to participate in the global competition. In the follow-up, it successfully acquired wuna aluminum, a century old aluminum company in Germany, and silver yatts in Australia. The former supplies high-end aluminum extruded seamless tubes and other products for Boeing, Airbus and other aircraft manufacturers, while the latter is the world's top super yacht manufacturer.

  Hong Ning and Lu Changqing said that the aluminum processing field has broad prospects for development. They hope that Zhongwang and Baowu can give full play to the complementary advantages of private enterprises and state-owned enterprises according to the strategic development needs of both sides, and further carry out exchanges and cooperation in equity cooperation and other aspects to enhance their competitiveness.

  Zou Jixin also said that China Zhongwang has done a lot of work in product development, equipment, certification and other aspects, and is at the forefront of the industry. This exchange is a good start. I hope to strengthen communication, deepen understanding in technology, equipment, equity and other aspects, so as to gradually reach consensus and strengthen cooperation.

  "One is a giant of state-owned enterprises, the other is a leader of private enterprises. If the two major metal processing enterprises reach substantive cooperation, they are likely to create an aircraft carrier level high value-added aluminum processing enterprise, participate in global competition, and change the pattern of the global aluminum processing industry." A person in the industry who did not want to be named said that it is precisely because of the importance of the two sides in terms of scale, strength and industry status that the strong alliance has great imagination space, so the market will pay close attention to the progress of the cooperation between the two enterprises.

• [Editor:Catherine Ren]