The government of Zhejiang in China is aiming to develop the province as a leading copper processing center in China. To achieve this goal, the Zhejiang Economic and Trade Commission has laid out a strategic plan for the local copper processing industry, to increase output and raise the sector's technological level.
Mao Gongzhong, an official with the Department of Construction Material, Coal, and Metallurgy under ZJETC told Interfax that all of copper processing companies in Zhejiang are privately-owned, but produce 36 percent of all copper products in China per year.
Although Zhejiang currently produces 1.2 million tons of copper products per year most of the province's output is of relatively low tech, low value added products.
Unlike many other Chinese copper producers, Zhejiang's manufacturers are not located near copper mines. "Companies normally purchase copper raw materials from the Shanghai Futures Exchange, or use copper scrap. Some companies also have agreements with domestic copper smelters for a steady supply for copper. The raw material supply is stable for production right now, " Mao said. However, the Zhejiang government encourages companies to better establish their own supply chain by cooperating with domestic or foreign copper mines, according to the announcement.
The sector is aiming for total production of 3.65 million tons of copper products per year by 2010, realizing $13.29 billion of sales revenue. The annual export of copper products is targeted for 800,000 tons.
Zhejiang hopes to have 5 major domestic brands, 2 or 3 world well-known copper processing companies, between three and five research and development institutions and national technology centers, which would make the Zhejiang copper processing industry become the largest copper processing base in China. "This is our basic goal and framework guiding the whole industry in the coming years," Mao said. He explained those statistics were estimated based on current situation of the industry and all on-going copper products projects in Zhejiang.
According to the announcement, the copper processing industry will be promoted in the five counties with the greatest concentration of - Yongkang, Yuhuan, Shangyu, Yuci and Longwan.
The local governments will strengthen cooperation for information exchange and resource supply. Mao pointed out that those countries have three main advantages.
First many copper scrap importers are based there, allowing a steady supply of scrap. Additionally, there is a large recycling scrap yard in Taizhou city, which collects scrap metal from old appliances and electronic equipment. Secondly, Mao said most small electronic appliances producers and hardware distributors are also located in those counties, forming a stable industrial chains with copper processing manufacturers. Last but not the least, local governments offer favorable policies to facilitate copper companies to enlarge their business.
Additionally, Hangzhou, Quzhou, and Huzhou, three major cities in Zhejiang, are planning to build several large-scale copper processing projects using advanced production technology.
Based on his conversations with key copper processing companies, Mao said the Zhejiang government would support them with policy, tax and financial measures. According to Mao, the Hailiang Group based in Zhuji city Zhejiang province and the Ningbo Jintian Copper (Group) Co., Ltd are the largest copper processing companies in Zhejiang and among the largest in China, with each producing more than 100,000 tons of copper products. Mao said the government hoped the two companies could grow "big and strong" and develop a global reputation.
Cooperating with scientific research institutes and large-sized equipment producers for developing state-of-the-art equipments is also critical to the industry's development, and so that high value added products will increase, according to the announcement.
Mao stressed the government encouraged copper products exports. "The current production mainly serves the domestic market, as China is a large consumer of copper products. But we still support companies to enhance cooperation with foreign companies, to bring in foreign investment and to enlarge their sales via exports," He said. However, he revealed that most local copper processing companies only sold to the domestic market, and exporting is still new business for them.