Jiaozuo Wanfang Aluminum Manufacturing’s （000612） wholly-owned subsidiary Jiaozuo Wanfang Electric will build two 300-megawatt （MW） power generators together costing 2.79 billion yuan to promote energy self-sufficiency, reports Securities Times, citing a company filing. The plants’ construction period is two years.
The aluminum smelter has an annual capacity of 420,000 tons, which requires six terawatt-hours of power per year. The company currently buys electricity from the power grid, putting it at risk of power shortages and entailing higher fees than a proprietary power source. Wanfang Aluminum’s reliance on the power grid forced it to cut one thirds of its capacity in October 2010, and it manufactured 140,000 tons less than planned in 2010.
The target power plant will require an annual coal supply of 1.9 million tons, which reduces the risk of power shortages because the company has coal affiliates in Shanxi Province. The estimated recovery period of the investment is 11.5 years.
Under current accounting standards, the company will record assets impairment of 319 million yuan on Wanfang Electric, thus reducing the company’s 2010 net profit by 239 million yuan. Its 2010 net profit plunged 40 percent year-on-year to 116 million yuan despite revenue growth of 9.6 percent year-on-year to 5.59 billion yuan.
豫公网安备41010502003434号