Armco Metals Holdings Inc., a ferrous scrap recycler and iron ore importer based in Shanghai, has announced it is establishing an OTO (online to offline) platform for steel scrap trading.
The platform is being established with the cooperation of Shanghai Meng Yi Network Technology Co. Ltd., which “will serve as the operating entity to establish and operate the e-commerce trading platform for steel scrap products,” according to an Armco press release. Armco calls the online trading system “a new strategic development for Armco Metals to expand and enlarge the steel scrap business from [its] traditional trading model to [an] OTO platform model with additional value-added services.”
The e-commerce venture is being established through a new Armco subsidiary called Armco Metals (Shanghai) Holding Ltd. and “is in the process of registration with registered capital of 10 million Chinese yuan ($1.6 million),” according to Armco.
Meng Yi will be operated from and based in Shanghai once registered, and Kexuan Yao, chairman of Armco Metals, will serve as executive director of the new company. The platform being created by Meng Yi will “connect decentralized steel scrap suppliers from upstream with downstream steel mills via Internet and provide services for facilitating steel mills’ purchase from and payment to suppliers,” says Armco.
“As e-commerce has been developing quickly in China and China’s government is encouraging and promoting the application of Internet technology in traditional business, management has been considering and studying the application and implementation of ecommerce strategy in our business,” says Yao. “Currently and in the short term, it provides a match and complements our business; for the long term, creating the OTO platform is an important strategic development which could lead the business transition for the company from solely selling steel scrap products in traditional methods to providing both services and products in the steel scrap business through the online platform,” he adds.