Vimetco’s success is based on a long-term plan to capitalise on the increasing global demand for aluminium by acquiring production facilities in emerging markets and providing them with the development capital and management skills needed to increase productivity and generate sustainable growth. Today, Vimetco is among the top five producers in Europe and among the top ten in China, the world’s largest aluminium market.
Vimetco’s business plan focuses on delivering increased value to its shareholders, customers, employees and the community within which it operates. Its core strengths include its effective vertical integration, expertise in value-added products, favourable geographic spread and its proximity to attractive end-markets. The plan is based on the Group’s ambitious strategy for global expansion – growing its businesses both organically as well as through acquisitions.
The Group realises cost savings and operating efficiencies as well as the security of supply through vertical integration, whether for electricity, anodes, bauxite or alumina. The Group is currently exploring the feasibility of further investing in bauxite mines and in alumina refineries in West Africa. Vimetco operates its own energy plants in China and intends to build generators in Romania. Nevertheless, the management constantly monitors and compares market and thirdparty pricing to assess whether any part of the vertically integrated value chain has ceased to be beneficial to Vimetco’s overall profitability or whether certain aspects can be sourced more effectively elsewhere.
The second strategic angle is Vimetco’s focus on both types of value-added products:
1. Primary value-added products include billets, slabs, wire rod. Vimetco’s Romanian and Chinese operations generate good added-value in this segment because additional production costs are marginal.
2. Processed value-added products, such as plates, sheets, coils and extrusions. Alro has already accumulated significant experience in this profitable business segment is planning further downstream expansion and improvement. Zhongfu is finalyzing construction of flat rolling plant with overall capacity of over 600,000 tonnes of specialized aluminium products. This plant is one of the most advanced and technological in China and will substitute significant share of currently imported products.
Vimetco’s strategy is driven by two main parameters: to achieve full vertical integration and to focus on value-added products. The integration process also includes power production – a key element and critical cost factor for any aluminium producer: electricity is a major element of the aluminium production process, accounting for 25-30% of total operating costs.