Zhongwang Says Aluminum Sales to Rise on U.S. Truck Demand

HONG KONG, Sept. 22 -- China Zhongwang Holdings Ltd., the country's largest maker of extruded aluminum products, said shipments to makers of light trucks in the U.S. and Europe may help increase overseas sales in the second half.

    "There is very good demand for aluminum used in trucks, and other transport purposes, in the U.S. and Europe," Chairman Liu Zhongtian said in an interview in Hong Kong today. The lightness of the metal makes it suitable for environmentally- friendly vehicles, he said.

    Zhongwang increased overseas revenue by almost seven times in the first half, compensating for drop in domestic sales. Carmakers in the U.S. and Europe are introducing more electric or hybrid cars, increasing demand for lighter metals used in the vehicles and batteries.

    Overseas sales in the second half will beat the first six months, Executive Director Lu Changqing said today without giving a specific forecast. The aluminum producer gets a bigger profit margin from its overseas sales, he said.

    Zhongwang fell 2.8 percent to HK$7.99 in Hong Kong trading. The Liaoning province-based company in April raised HK$9.8 billion ($1.3 billion) in what was then the world's largest initial public offering this year.

    First-half sales in China fell to 4.95 billion yuan from 5.59 billion yuan a year earlier, according to the company's earnings statement last month. Sales outside the country soared to 1.38 billion yuan in the first half, compared with 211.4 million yuan a year earlier.

    Zhongwang last week said it didn't get any business from China South Locomotive & Rolling Stock Corp. in the first half as there was a delay in tenders by China's Railway Ministry. China South accounted for more than 7 percent of Zhongwang's sales in the first six months of 2008.

    Lu said today he doesn't know when tenders will resume.

    The company plans to offer more titanium products for use in vehicles, Chairman Liu said. The new business may make a "significant" contribution to Zhongwang by 2013, he said.

    (Source: Bloomberg)