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. Mr Liu said Oriental was in the midst of transforming its core business from metal trading to industrial investments. The move would secure a more prominent market share on the mainland and a stronger profit growth, he said. At present, 60 per cent of the group's profits came from metal trading while the rest was generated by metal industry investment. Larger investment would be geared towards the manufacturing sector within the next few years. The existing breakdown of revenue might be reversed, with the industrial arm contributing 60 per cent of total profits, Mr Liu said. The expansion, however, faced the risk of substantial capital input and a longer pay-back period, he said. 'Metal trading only requires basic bank facilities but industrial investments require long-term loans and higher interest expenditure. The company's interest payments will also increase,' he said. The company had eight joint ventures related to the manufacturing of extrusions, semi-conductors, aluminium cans and various metal products. Total industrial investment stood at $500 million to June this year. More industrial projects, including state-run factories on the mainland, would be identified for direct investment, Mr Liu said. The state-owned factories acquired would be restructured to increase efficiency and welfare arms attached to the enterprises would be disbanded.