Saturday, November 28, 2009   


Xingfa on its mettle

Alfred Liu

Monday, April 21, 2008


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.


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