YMG to acquire Alcoa Shanghai
Shanghai. August 12. INTERFAX-CHINA - Yunnan Metallurgical Group Co. Ltd. (YMG) signed an agreement on Aug. 11 in Yunnan Province's Kunming City to fully take over Alcoa (Shanghai) Aluminum Products Co. Ltd., a YMG employee told Interfax on Aug. 12.
"The acquisition of Alcoa Shanghai will further strengthen the company's capability to produce aluminum foil, making YMG China's leading manufacturer of light-gauge aluminum foil," a YMG employee close to the acquisition deal, who wished to remain anonymous, said. However, she did not disclose the size of the investment.
"The main reason behind Alcoa Inc.'s sale of Alcoa Shanghai may be that its foil products are no longer competitive in the Chinese market, as China has seen an oversupply of low-quality aluminum foil," an industry insider, who asked to remain anonymous, told Interfax.
YMG has an aluminum foil joint venture named Yunnan Xinmeilu Aluminum Foil Co. Ltd. (YXAF), which has an annual production capacity of 25,000 tons of aluminum foil, including 15,000 tons of aluminum foil with a thickness less than 0.009 millimeters. Meanwhile, Alcoa Shanghai has an annual production capacity of 30,000 tons of aluminum foil.
"YMG may decide to inject the assets of Alcoa Shanghai into its joint venture in the future, but a timetable cannot be finalized until completion of the acquisition and an evaluation can take place," the employee said.
Alcoa Inc. holds a 56 percent stake in YXAF, while YMG and Yunnan Tobacco Material (Group) Co. Ltd. hold the remaining 44 percent.
Alcoa Inc., the world's leading aluminum and aluminum product producer, has other aluminum production facilities in China, including a heat exchanger material facility in Kunshan City, Jiangsu Province, and a high-quality aluminum sheet production facility in Qinhuangdao City, Hebei Province.
-GD