Abstract: Zhejiang Hailiang Co., Ltd., to improve the domestic layout and expand the overseas territory, cooperates with SMM to outline “2019 Distribution Map of China Copper Industry Chain”, making its due contribution to the development of China's copper industry chain. Hailiang Stock is an enterprise with refined management in the copper processing industry. Since its establishment in 2001, Hailiang Stock has been dedicated to not only researching, developing, producing, selling and serving high-end copper products, conductive profiles and aluminum materials, but also providing customers with quality products and services, offering shareholders reasonable profits and returns, and affording employees a good platform for growth.
SMM coverage April 30th: Despite that products in China's copper processing materials industry feature diversification, a complete range of specifications and growing processing capacity, high-end products and products under technical barrier agreement still rely on import due to the domestic environment of homogenization competition, overcapacity, and low profits. Against the backdrop of the implementation of domestic supply-side reform and financial deleverage policies, the production capacity of processed materials in various sectors has accelerated centralization in recent years. In the long run, leading enterprises in each domestic processing materials industry will definitely emerge whilst some new enterprises will take on the market responsibility.
Hence, Shanghai Metals Market (SMM) analyzed the development of the industry and integrated China's copper industry resources to make the “2019 Distribution Map of China Copper Industry Chain”. We invite associations in the copper industry from both upstream and downstream to create and supervise, and warmly welcome prestigious enterprises to join! Among these enterprises, Zhejiang Hailiang Co., Ltd., to improve the domestic layout and expand the overseas territory, cooperates with SMM to outline “2019 Distribution Map of China Copper Industry Chain”, making its due contribution to the development of China's copper industry chain.
About Zhejiang Hailiang Co., Ltd.
Zhejiang Hailiang Co., Ltd. is an enterprise with refined management in the copper processing industry. Since its establishment in 2001, Hailiang Stock has been dedicated to not only researching, developing, producing, selling and serving high-end copper products, conductive profiles and aluminum materials, but also providing customers with quality products and services, offering shareholders reasonable profits and returns, affording employees a good platform for growth, and delivering advanced management concepts and manufacturing experience for the industry. Moreover, through continuous technology R&D, craftsmanship upgrading and equipment improving, Hailiang Stock has changed the situation of heavy processing and heavy pollution in the copper processing industry and protected the environment for green development. Hailiang Stock, with its craftsmanship spirit and high-quality products and service for the public, has made its due contributions to promoting economic development.
Hailiang Stock’s Global Layout
The cross-border territory of Hailiang Stock in 2019 has become wider, and the leading role of Hailiang Stock in the copper rod industry has been further strengthened.
On 31st March 2019, Zhejiang Hailiang Co., Ltd. announced that the transaction between the company and KME has been delivered and completed. Hailiang Stock acquired KME’s five factories in Europe with €119 million.
Hailiang Stock is one of Shaoxing's first private enterprises that adhered to the policy of “going global”. From 2007 when the company established a factory in Vietnam to 2016 when it acquired the copper processing business of Luvata, JMF (a U.S. company) to this year when it acquired five factories of KME, Hailiang Stock has strategically formed a global layout of copper processing. The road taken by the cross-border giant toward a copper processing “empire” has become wider and wider.
In January 2019, Hailiang Stock singed an Equity and Asset Purchase Agreement with KME to acquire its five factories in Germany, France, Italy and Spain, including more than 1,000 employees and the production capacity of 50,000 tons of copper pipes and 230,000 tons of copper rods. In 1989 when Hailiang Stock was established, it aimed at producing copper rods. Since 1996, it has shifted to manufacture copper pipes until it is now the world’s largest. However, its copper rods business remains standstill as the production capacity of copper rods last year reached only 50,000 to 60,000 tons, yet they remain to be a focus of Hailiang Stock’s future development.
Trademarks and patents are also included in the transaction, which will help Hailiang Stock to enhance its R&D technology and manufacturing capabilities of high-end copper alloy products and stand firm in the European market.
Usually, Chinese companies after merging and acquiring overseas companies tend to absorb advanced Western management concepts. Hailiang Stock, however, decides to export management. Upon the delivery of five factories in Europe, Hailiang Stock sent more than 20 employees to Europe to start various integration work.
In terms of refined management and inventory management, Hailiang Stock purchases raw materials 2 days in advance to save financial cost. In regard to risk management, after years of exploration, Hailiang Stock establishes a complete series of systems as well. According to reports, copper price accounts for 90% of Hailiang Stock's operating costs. It is known that copper price fluctuates, but no matter how hard the fluctuation is, the risk influence will be minimized as long as there is a mature risk management system.
Hailiang Stock’s strategy of “going global” has long been implemented.
The first stop of “going global” came to Vietnam. In 2007, Hailiang Stock built a small copper processing enterprise in Vietnam. In 2008, it built a copper processing plant with a capacity of over 70,000 tons in Tien Giang, Vietnam. Today, the copper processing enterprise has become the largest local taxpayer.
In December 2016, Hailiang Stock acquired Luvata’s three factories in Asia with 880 million CNY. Luvata, based in Finland, is one of the earliest companies in the world to serve copper pipes with a history of nearly 200 years. Along with the three factories, a large number of patents and trademarks of Luvata in the world were also acquired. In the following two years, the integration of the Luvata factories in Asia brought positive effect, reflected by greatly improved productivity and operational efficiency. In 2018, the annual sales of these three factories increased by more than 60% compared with that before M&A, and the net profit reached nearly 100 million CNY, an increase of nearly 90%.
Last year, Hailiang Stock acquired more than 1,200 acres of industrial land in Houston, USA, part of which will be used to build factories this year. Hailiang Stock has already had a sales channel in the United States—JMF. In the first half of 2016, Hailiang Stock invested US$30 million to acquire JMF, which is a leading wholesaler of air-conditioning and refrigeration pipes and plumbing pipes in the United States and has always been a customer of Hailiang Stock. In the first year of the acquisition, the synergistic effect was quite significant, which greatly boosted Hailiang Stock’s copper pipe exports
With its leading production capacity in the industry, superior management capability and excellent strategic vision, Hailiang Stock has started its global layout plan step by step from establishing a copper processing enterprise in Vietnam in 2007 to acquiring KME’s 5 factories today. All these endeavors are enough to prove Hailiang Stock's leading role in the field of copper processing.
As a leading enterprise in Shaoxing, Hailiang Stock is committed to setting an example for other enterprises. In terms of cross-border mergers and acquisitions, Hailiang Stock encourages enterprises with potential in Shaoxing to actively participate in cross-border M&A when there are good M&A targets. With M&A experience, their understanding of the industry and the company will be different, because their vision is expanded.
Looking back its road to cross-border M&A, Hailiang Stock noted that M&A is never plain sailing and unexpected surprises will come along. If we can look at a problem from different perspectives, we can still learn a lot from the M&A experience even if there are difficulties encountered.
About “2019 Distribution Map of China Copper Industry Chain”
1. Enterprise distribution map 2019 representative enterprises of China electrolytic copper metallurgy and details on electrolytic copper brands
2019 representative enterprises of China copper processing: copper strip & plate, copper foil, copper pipe, copper busbar, copper wire, copper rod, copper alloy and other copper processing materials
2019 annual production capacity of China copper processing representative enterprises
Delivery storage info. & storage capacity
2. Copper processing materials data 2019 China copper processing ratio
2019 China copper metallurgy raw materials ratio
2010-2019 China copper processing materials production capacity
2010-2019 China copper materials import and export volume
3. Bidding enterprises for 2019 SMM electrolytic copper spot price
Bidding enterprises for 2019 SMM overpriced Yangshan copper
2018 national outstanding trader of copper processing materials