China Hongqiao Group

from Wikipedia, the free encyclopedia
China Hongqiao Group Limited.
legal form Corporation
ISIN KYG211501005
founding 1994
Seat Binzhou , Shandong , People's Republic of ChinaChina People's RepublicPeople's Republic of China 
management Zhang Shiping (Founder, Chairman of the Board, Managing Director)

Zheng Shuliang (Vice President, Executive Director)

Zhang Bo (CEO, Managing Director)

Number of employees 65.076
sales $ 7.02 billion
Branch aluminum
Website http://hongqiaochina.com/

China Hongqiao Group Limited is a Chinese company founded in 1994 that specializes in the production of aluminum . Hongqiao is currently the largest aluminum producing company in the world after overtaking its main competitor, Russian company Rusal, in 2015.

The Chairman of the Board and Managing Director is Zhang Shiping, named the sixth most influential entrepreneur in China by Forbes China and ranked 192nd richest in the world by Huru. His son Zhang Bo is the CEO (general manager) of China Hongqiao.

Hongqiao has been producing aluminum and electricity since 2002 , and says it has more than 4 million tons of production capacity.

The company has several subsidiaries , including Shandong Weiqiao Aluminum Power Co., Ltd., Huimin Huihong New Aluminum Profiles Co., Ltd. and Hongqiao Investment (Hong Kong) Limited.

history

In July 1994, the Shandong Hongqiao company, then active in the production and sale of trousers, was renamed the China Hongqiao Group. With the takeover of Aluminum & Power in June 2006, which had specialized in thermal energy and was founded in 2002, the reorientation of Hongqiao towards aluminum production began a few months later.

In 2007, the company's annual production capacity reached approximately 301,513 tons.

In March 2011, Hongqiao was listed on the Hong Kong Stock Exchange at $ 7.20 per share. The aim was to raise $ 2.2 billion in new capital. At the same time, the production capacity increased to 1.1 million tons per year.

According to the company, annual aluminum production exceeded 4 million tons for the first time at the end of 2014.

In March 2016, Hongqiao announced a capacity increase of 16%, bringing the annual aluminum production to 5.2 million tons.

Group activities

China

The Group's central production sites in China are in Binzhou, in the Shandong province.

Indonesia

As part of a joint venture with PT Well Harvest Winning Alumina Refinery , China Hongqiao Group announced in December 2012 an investment of USD 1.5 billion to create an alumina manufacturing company in Borneo with an expected annual production capacity of 2 million tons.

In 2016 , the company officially opened its first factory in Indonesia as the majority shareholder with 56% of the shares in PT Well Harvest Alumina, producing 1 million tons of aluminum per year. This was both the first Chinese investment in an alumina refining facility and the first aluminum factory to be built in Indonesia. Consisting of a power station and a seaport in Ktapang in the Kalimantan region, the factory converts bauxite into aluminum oxide. Sun Xiushun, president of the Winning International Group shipping company and shareholder of the joint venture, said the treated alumina is mainly used to meet the demand for raw materials from local Indonesian aluminum smelters. The remaining aluminum oxide is therefore primarily exported to China, the Middle East and other regions.

Guinea

In June 2014, China Hongqiao Group Logistics Company Ltd. announced that it has entered into a US $ 120 million letter of intent to acquire an unspecified bauxite mining company in Guinea . The company in question holds bauxite mining rights in Guinea on an estimated 2.2 billion tonnes with a term of 25 years. The main goal of the China Hongqiao Group was to gain access to new bauxite deposits to meet the growing demand in China. In March 2015, the company confirmed it had reached an agreement on various mining and port investments totaling US $ 120 million to advance the development and export of bauxite.

According to Hongqiao CEO Bo Zhang, an additional $ 200 million investment will be made as part of a new consortium with the Port of Yantai and the Boke bauxite mine to enable the production of 10 million tons of bauxite by 2017.

In November 2015, 170,000 tons of bauxite were shipped from Yantai to China. In March 2016, China Hongqiao Group stated that it exported around 15 million tons of bauxite for the full year 2016. 30 million tons are targeted for 2017.

criticism

Overcapacity

Despite efforts by the Chinese government to use reforms to reduce the production surplus in the domestic bauxite industry, Hongqiao announced in March that it would increase production by another 16% to 6 million tons by the end of 2016. According to an estimate by Peter Thomas, vice president of Zaner Group LLC, a metal broker based in Chicago, this will result in a 1 to 2% drop in aluminum prices.

The overcapacities in the Chinese industry result from intended factors, such as B. cheap loans and government subsidies to reduce the cost of production for companies. In Hongqiao's case, the company's growth can be explained by more than $ 2.1 billion in loans taken out in 2015.

In August 2016, Hongqiao CEO Zhang Bo rejected fears of overcapacity in the aluminum industry and instead emphasized its stability.

The company has seen record growth since it was listed on the stock exchange in 2011. The production capacity of 1.1 million tons has been increased to 5.2 million tons since the IPO (March 2016).

Environmental concerns

The production of aluminum is very energy-intensive. Accordingly, Hongqiao's aluminum factories are heavily dependent on coal-generated electricity. Due to the high energy consumption, Hongqiao's Chinese production facilities cause CO2 emissions of more than 100,000 kt per year. In 2012, Chinese journalists reported on the deteriorating living conditions of people near the factories. Air and water pollution were cited as the main reasons. Although the company reported using coal ash to produce aluminum in the same year , satellite images of the Shandong factory showed a large amount of red mud , a toxic by-product of the bauxite production process. Because aluminum is very expensive to make from coal ash, the company decided to use bauxite instead. Toxic waste was then dumped near agricultural land, leading to fears that alkaline substances from iron oxides , silicon dioxide and titanium oxides could be released into the atmosphere.

In 2016, Hongqiao was charged with operating unlicensed furnaces with a capacity of 2,000kt and disregarding Chinese emission standards of environmental fraud.

After the Chinese Communist Party passed more stringent environmental regulations, Hongqiao began making the transition to renewable energies and stopped operating the smallest and most unclean power plants.

In October 2016, the South China Morning Post reported that Hongqiao's aluminum smelter capacity in Binzhou was at risk after the city ordered a production stop on its production lines with a total annual capacity of 3.61 million tons. Because of "disregard of environmental protection permits before the construction and operation of the plants", the company has to expect not only fines but also the closure of other locations. At the same time, the construction of an aluminum smelter with an annual production capacity of 1.32 million tons was stopped because, once again, no environmental impact assessment was carried out. Hongqiao did not issue an official press release, but stated that the government's allegations were understood and noted.

Power generation

China Hongqiao Group was one of the first companies to adopt the so-called " Weiqiao Model ", in which aluminum plants are supported by self-built, coal-powered power plants that often do not comply with environmental regulations. This organizational model is now widely used in the Chinese aluminum industry.

In 2012, the CCP media reported that by generating cheap electricity regardless of the national grid, the company was violating the legal requirements for electricity generation. The State Development and Reform Commission suggested that the electricity produced by Hongqiao is a major contributor to air pollution by removing environmental protection equipment from factories to reduce production costs. Hongqiao denied the government's repeated allegations. In 2015, the corporation shut down its smaller power plants to demonstrate its commitment to clean aluminum production.

Anonymous report

A report published in November 2016 by an anonymous short seller accused Hongqiao of having amassed a mountain of debt of RMB 67.7 billion and hiding it behind unusually high profit margins, thereby embellishing the company's true profitability.

Another report from Emerson Analytics, which appeared to confirm the allegations, prompted the company to suspend its stock trading on March 1, 2017, after the stock fell 8.3% in 30 minutes. On March 21, Hongqiao announced a "possible delay" in the publication of its annual results and annual report for the year ended December 31, 2016, due to inconsistencies raised by auditors Ernst & Young. The following day, trading in China Hongqiao shares was stopped again.

See also

Individual evidence

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  8. ↑ Milestones. Retrieved December 20, 2016 .
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  14. ↑ China's 1st overseas alumina oxide project starts operation. Retrieved December 12, 2016 .
  15. ↑ Hongqiao starts China's first overseas alumina production in Indonesia. Retrieved December 12, 2016 .
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  17. ↑ Mohamed Toure: What will China's bauxite mining deal mean for Guinea's environment? (No longer available online.) Africa Times, December 14, 2014, archived from the original on December 22, 2016 ; Retrieved December 19, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / africatimes.com
  18. ↑ Yantai port co-invests in Guinea bauxite port. (No longer available online.) Chinamining.org, April 16, 2015, archived from the original on December 22, 2016 ; accessed on December 21, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.chinamining.org
  19. ↑ China Hongqiao close to clinching bauxite deal in Guinea. South China Morning Post, March 30, 2015, accessed December 21, 2016 .
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  27. ↑ Hongqiao Aluminum - Dirty Dealings, Dirty Numbers, and Dirty Air. Toxic Leaks, accessed December 21, 2016 .
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  30. ↑ China Hongqiao ordered by regulator to shutter aluminum output paper. Reuters, October 31, 2016, accessed December 21, 2016 .
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  35. ↑ 落实 环境保护 要求 魏 桥 创业 6 × 30 兆瓦 热电 机组 关停 拆除. Retrieved December 13, 2016 .
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  37. ^ Trading Suspended of China Hongqiao Shares After Report Alleges Financial Inconsistencies. March 2, 2017, accessed March 7, 2017 .
  38. ↑ POSSIBLE DELAY IN PUBLICATION OF ANNUAL RESULTS AND DESPATCH OF ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2016. (PDF) Hong Kong Stock Exchange, March 21, 2017, accessed on March 28, 2017 .
  39. ↑ EXCHANGE NOTICE - TRADING STOP. March 22, 2017, accessed March 28, 2017 .