Ge Honglin, chairman of Chinalco, wants to join forces with Jack Ma to sell aluminum online

  • Categories:Industry Info
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  • Time of issue:2018-05-16
  • Views:408

(Summary description)The two parties jointly set up an integrated metal e-commerce trading platform in China, and migrated the procurement and sales business of Chinalco from offline to the metal e-commerce trading platform.

Ge Honglin, chairman of Chinalco, wants to join forces with Jack Ma to sell aluminum online

(Summary description)The two parties jointly set up an integrated metal e-commerce trading platform in China, and migrated the procurement and sales business of Chinalco from offline to the metal e-commerce trading platform.

  • Categories:Industry Info
  • Author:
  • Origin:
  • Time of issue:2018-05-16
  • Views:408

The two parties jointly set up an integrated metal e-commerce trading platform in China, and migrated the procurement and sales business of Chinalco from offline to the metal e-commerce trading platform.


Ge Honglin, the chairman of Aluminum Corporation of China (hereinafter referred to as Chinalco), who is saddled with the task of turning around its losses, is finally unable to withstand the downward pressure of the industry and is ready to "connect the electricity to the Internet" of this old state-owned enterprise. Ge Honglin has chosen to cooperate with e-commerce leader Alibaba to build China's metal e-commerce trading platform.


Ge Honglin, chairman of Chinalco, held talks with Jack Ma, chairman of Alibaba Group, at the company's headquarters on Nov. 12, according to a statement on the company's website on Monday. The two sides discussed the cooperation between innovative entities and e-commerce enterprises, and agreed on the working principles and operation methods for the next step.


The two sides will make full use of the traditional enterprise chinalco as non-ferrous industry industry influence, and alibaba existing electric business platform technology and suppliers, customers, financial services, logistics services, such as resources, jointly set up the integration of China's metal electrical business trading platform, chinalco's purchase sales business, by offline migrated to metal electricity trading platforms, Achieve the drainage of the industry users' purchasing and sales business to the platform, and promote the business promotion of the platform.


Unlike other commodity producers and traders, such as steel, who have built ecommerce platforms on their own, Chinalco is clearly betting on Alibaba's ecommerce power and brand. "Chinalco is hoping to use the popularity of Alibaba's e-commerce trading platform to avoid detours." Zhuochuang information aluminum analyst Zhang Meng said.


"Alibaba is a world-famous e-commerce company, whose business covers transaction, logistics, finance, credit system and other fields. It not only has a large number of online suppliers, traders and customer resources, but also has a strong big data analysis capability and cloud computing platform, as well as mature e-commerce platform building technical capabilities." During his meeting with Ma, Ge Honglin expressed his hope for business cooperation in e-commerce, logistics, cloud computing, big data and other fields.


After two years of acquisitions in various industries including TMT, logistics and media, Mr Ma is determined to move into commodities this time. He said the cooperation between Alibaba and Chinalco will start from non-ferrous metals industry and gradually expand to traditional industries such as ferrous metals industry, coal industry and petrochemical industry. His aim is to "change the original image of the service platform for small and medium-sized enterprises, improve the industry layout and structure of Alibaba platform, and promote Alibaba e-commerce platform in various industries".


If the cooperation between Chinalco and Alibaba comes to fruition, it would be China's first aluminum e-commerce trading platform. Previously, according to the Great Wisdom ASDAG News Agency reported that the leading steel and steel e-commerce enterprise Shanghai Steel Union (300226.SZ) intends to cooperate with Nanshan Aluminum Industry (600219.SH) to build an aluminum e-commerce platform, but so far, neither side has announced the progress of the cooperation.


In the steel industry, e-commerce platforms are springing up like mushrooms. Yue Wenjing, steel industry analyst of Zhuochuang Information, said that the domestic steel e-commerce platform has developed to about 200. In her opinion, the "online" of bulk commodities can shorten the circulation process of products on the one hand and reduce the warehousing and logistics costs in the intermediate process; on the other hand, it can expand the business scope of products and break the traditional profit model of "making price difference by fliping".


Yue Wenjing believes that the current domestic steel "Internet +" is still in the stage of exploration and progress, its marketing model, product quality supervision and logistics system is not perfect, although to a certain extent to occupy the steel sales market, but the scale is still to be developed, online buyers and sellers trust needs to be improved. In addition, iron and steel online platform more, has not yet formed such as "Taobao" general influence of the larger leader, iron and steel "Internet +" still need to explore.


Chinalco's partnership with Alibaba faces similar problems. "Trading commodities online is very risky." Zhang Meng told Jiemian News, "After all, hundreds of millions of bulk commodities are different from 180 yuan of clothes and shoes. The transaction amount is too high. If you are not familiar with the customers, you must have a field survey of the product specifications and quality before placing an order."


"It's too much trouble to return clothes bought online when they're bad, let alone bulk goods." Zhang Meng believes that due to the high logistics costs, it is difficult for metal trading platforms to implement the return mechanism of consumer goods trading platforms at present.


In addition, Zhang Meng also told Jianjian News reporter, Chinalco's products in the industry is on the high side, taking electrolytic aluminum ingot as an example, recently higher than the market price of 100 yuan/ton.


"Although Chinalco's products are of better quality, they are not good enough for customers to pay such a big difference." 'Even if Chinalco moves its products from offline to online, it still hasn't improved its competitiveness,' Mr. Zhang said.


Zhang Meng believes that in addition to the policy impact, Chinalco responded to the State Council proposed in August this year "to promote e-commerce and other emerging circulation methods, the implementation of the 'Internet + circulation' design action, to promote the integration of physical and network market development" policy; The most fundamental reason is the downward pressure on the aluminum industry is growing, serious overcapacity, the Internet may be able to alleviate offline sales pressure to a certain extent.


With aluminium now below $1,500 a tonne, prices will continue to come under pressure as positive US consumer confidence data support expectations of a December rate hike and oil prices continue to fall.


The domestic market has also been "devastated". According to a research report by Zhuochuang Information, in October, the market prices of alumina in various regions of China have been continuously lowered, and enterprises have been forced to slash the transaction prices in order to recover quickly due to the deteriorating financial situation.


The performance is more serious area for Shandong, because the cost is high, and the demand is shrinking continuously, the mainstream transaction price is falling continuously, falling substantially as much as 100 yuan. Shandong's sharp fall, also directly lead to the rest of the region with the fall, and has begun around 2000 yuan/ton weak operation.


To shed its "king of losses" label, Chinalco is speeding up fire sales.


On November 14, Aluminum Corporation of China (601600.SH) announced that it plans to share all shares of Aluminum Nanhai Alloy Co., Ltd. (hereinafter referred to as Nanhai Alloy) with its subsidiary Chinalco International Trading Co., Ltd. (hereinafter referred to as Nanhai Alloy) with the transfer price of not less than 210 million yuan.


Established in June 2007, Nanhai Alloys, a wholly owned subsidiary of Chinalco, mainly deals with processing and trading non-ferrous metals, but has suffered losses in recent years, including 19.5 million yuan last year and 8.28 million yuan in the first three quarters of this year.


At the same time, Chinalco is ready to dispose the buildings, structures and other assets of its Guizhou branch located in the electrolytic aluminum plant area to Guiyang Land Mineral Resources Reserve Center, with a disposal price of 1.95 billion yuan.


In addition, Chinalco also transferred the property assets of its wholly owned subsidiary, Chinalco Hong Kong Limited, to Chinalco Overseas Holdings Limited, a subsidiary of parent company Chinalco, for 372 million Hong Kong dollars (about 306 million yuan).


The above three disposals will bring income of nearly 2.5 billion yuan. This for the third quarter of another loss of Chinalco, is undoubtedly a shot in the arm.


"Since Ge Honglin took office, you can clearly see the changes in Chinalco." Mr Zhang said the "chairman of the mayor" was meeting local government leaders frequently, which showed that the old state-owned company was actively trying to survive, while the investment in the "Internet Plus" boom also showed that Chinalco could control and respond to the market more quickly than before.


As the head of China's largest aluminum company, Ge Honglin's recent appearances at industry conferences are something of a novelty to Mr. Zhang. "In the past at Chinalco, leaders at this level would not have attended industry meetings." Zhang Meng said.

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