New | China Hongqiao builds more power plants and secures materials abroad

China Hongqiao Group, which is poised to surpass Russia's Rusal as the world's biggest aluminium producer, plans to spend 10 billion yuan  on building power plants and expanding smelting capacity in China and on projects in Indonesia and Guinea.

The Shandong firm aimed to raise its output by 22.5 per cent to about 4.1 million tonnes this year, said Wong Yuting, Hongqiao's head of corporate finance.

Wong also said the firm planned to increase its annual output capacity to about five million tonnes by the end of the year.

This is likely to make Hongqiao the largest aluminium producer since Rusal has indicated its plan for output to remain flat at 3.6 million tonnes this year, while  Aluminum Corp of China produced 3.38 million tonnes last year and suffered a record 16.2 billion yuan net loss due to weak cost competitiveness and low price of the metal.

Hongqiao, which made a net profit of 5.3 billion yuan last year, last week said it expected to post a "significant" rise in profit for the first half, citing higher sales following expanded production capacity and lower material prices and energy costs as it sourced more electricity from self-built power plants.

Wong said Hongqiao planned to add 1 GW of power generating capacity this year from two self-built plants and one acquired plant, raising its capacity to 7.6 GW. This means 80 per cent of its power demand will be met by its own plants by the end of the year, up from 72 per cent last year.