Fosun Group

Fosun set to acquire nonferrous metal firm

PUBLISHED : Wednesday, 19 September, 2007, 12:00am
UPDATED : Wednesday, 19 September, 2007, 12:00am

Fosun International, which on Monday reported that first-half earnings doubled, is preparing to buy a nonferrous metal maker to secure supply of raw materials for its steel production as well as other minerals.

'We have been seeking some acquisition opportunities in the nonferrous metal and coke industries for the past two to three years,' vice-chairman and president Liang Xinjun said yesterday. 'We have achieved significant progress in a nonferrous metal project and will announce it soon.'

Nonferrous metals such as nickel and molybdenum are used as raw materials in steelmaking 'and some of them, such as gold, are worth investing in for the long term', Mr Liang said.

He said Fosun, which raised HK$11.5 billion in a Hong Kong initial public offering in July, was bullish about the mainland's nonferrous-metals market in the next five to 10 years.

The firm, whose interests include property development and pharmaceuticals, is also looking to expand into banking. 'We would like to invest in a mid-sized local bank and expand nationwide within two to three years,' Mr Liang said.

Fosun chairman and chief executive Guo Guangchang said the firm might consider spinning off some of its business on the Hong Kong or Shanghai exchanges next year.

First-half profit at the Jiangsu-based company jumped to 826.6 million yuan from 415.5 million yuan a year earlier, driven by a surge in earnings from its steel business to 632.4 million yuan from 156.1 million yuan. Total sales rose 29 per cent to 14.26 billion yuan.

'We are confident of achieving a full-year profit of 2.15 billion yuan [this year], as forecast in our prospectus for the July stock offering,' chief financial officer Ding Guoqi said.