ORIENTAL Metals Holdings is increasing its investment in industrial projects to secure higher profit yields and larger market share on the mainland.
The China-backed metal trader and investor said its acquisition in North China Aluminium, China's largest aluminium-foil manufacturer, could be completed by the end of this year.
The deal was part of a strategy to achieve stronger direct investment in China's metal industry, said Liu Yang, Oriental Metals president.
Hong Kong-listed Oriental Metals is a subsidiary of China National Non-ferrous Metals Industry, a state-owned corporation co-ordinating the mainland's non-ferrous metals industry.
Last month it announced its intention to lift its stake in North China Aluminium in Heibei province to 51 per cent from 26 per cent and was awaiting approval from Beijing and Oriental Metals shareholders. The transaction was priced at about HK$88 million and would be paid through a US$10 million bank loan.
North China Aluminium recorded net profits of 31 million yuan (about HK$28.27 million) last year and Mr Liu expected the amount could surge to 42 million yuan this year.
North China Aluminium had an annual demand of 15,000 tonnes of aluminium ingots, of which 10,000 tonnes would be supplied by Oriental Metals in the first year after the acquisition.
