Nanshan’s US Aluminum Investment Set to Ring Hollow 南山铝业的美国投资计划注定会失败

By newsdoug on May 12, 2011

Nanshan Aluminum’s (Shanghai: 600219) new plan to open an aluminum extrusion plant in the US indicates China is taking a new approach to this difficult and politically sensitive market. The company has said it will invest $161 million to build a plant in the state of Indiana, in a bid to get around US protectionist measures targeting aluminum made in China. (English article) Many will recall that Angang Steel’s (HKEx: 347) plan to invest in a US steel mill seemed to fall apart last year when it ran into political resistance, even though the US plant it tried to invest in was struggling. This new plan from Nanshan – which certainly received Nanshan goes mining outside China approval at the highest levels in Beijing – would seem to be a new approach aimed at circumventing any politicians worried about a Chinese firm taking control of a US one in this sensitive area. The only problem is, I don’t see any way that Nanshan or any other Chinese company can succeed in this labor-intensive sector in the US, as their main advantage is the low costs they can get in China. Furthermore, union politics common at this kind of factory have been difficult for Chinese firms operating overseas to navigate in the past, and I see no reason that Nanshan – which has little or no overseas experience – will fare any better.

Bottom line: Nanshan Aluminum’s new approach to overseas investment is destined to fail, and won’t provide any new model for Chinese investments in the US.

南山铝业<600219.SS>在美国开设铝型材加工厂的新计划暗示，中国正对这个高难度且政治敏感的市场采取新办法。南山铝业表示，公司计划投资1.61亿美元，在美国印第安纳州修建一座高端铝型材加工厂，此举旨在避开美国对中国产铝制品的保护主义措施。很多人会想起，因遭遇政治阻力，鞍钢<0347.HK>投资一家美国钢铁厂的计划去年似乎不了了之。南山新计划似乎是为规避美国政客对中国企业在该敏感行业控制美国一家企业的反对，而且该计划肯定得到了北京最高层的批准。唯一的问题是，我看不到南山铝业或其他任何中国企业在美国从事这一劳动密集型产业会有任何成功之道，因它们的主要优势就是在中国能够实现的低成本。此外，此类工厂普遍存在的工会政治一直都让那些在海外运营的中国企业穷于应付，我看不到南山的境遇会比先行者们好到哪里去，毕竟南山本来就缺乏海外运营经验。

一句话：南山铝业的海外投资新策略注定将以失败告终，也不会为中国对美投资提供任何新模式。

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