Han Yongmao: Utmost expanding the downstream market and benefiting from magnesium metal deep processing products

Asian Metal: Thanks for granting this interview, Mr Han. Could you please give us a brief introduction to the main products and the production status of Taiyuan Kang Mei Technology Development Co., Ltd.?

Han: Kang Mei was founded in 2008, mainly engaging in deep processing of magnesium alloy and its products with annual output of 20,000 tonnes of magnesium alloy ingot, 5,000 tonnes of magnesium alloy extruded products, 500,000 sets of magnesium alloy electric wheel hub and about 5,000 tonnes of other die-casting fittings. Currently, the company basically runs well and operating at full production capacity.

Asian Metal: Since 2014, the price of magnesium dropped dramatically with sporadic market activities due to oversupply of the material and the financial strain of producers. Therefore, the weak price and poor demand of magnesium alloy keep going in the market. However, Kang Mei still achieved progress under such stagnant market conditions, so could you tell us what your company strategy in this year?

Han: According to this year’s market condition, we will vigorously develop magnesium downstream products and expand die-castings market while keeping our present regular customers. Expanding magnesium alloy market has proved to be a good opportunity and has already produced good results. The long-term strategy is keeping active both in the domestic and foreign market, striving to expand downstream market and gaining more profits from magnesium deep processing products.

Asian metal: Magnesium alloy producers in the south have a lot price advantages due to the cost cut they made by recycling scraps and putting some into the alloy production. How to secure price advantage for your company in the fierce market competition?

Han: Kang Mei Science and Technology Park is the only magnesium alloy recycling economic and industrial park awarded by Taiyuan Government. The company covers the full industrial chain of smelting, die casting, extruding, and excess material recycling of magnesium alloy. So recycling waste material is not the only way to reduce costs. In addition, with years of proven techniques and managerial experiences, we are able to control our producing costs to obtain reasonable and equal or more benefits than other producers in this industry.

Asian Metal: Currently, the magnesium alloy price continuously hovers in the lower level; many producers stated that it is getting harder to make a profit in market compared with same period of the previous years and the orders volume dropped sharply. How about your company and what is your point of view for the market trend for the late in December?

Han: It did have influence on our business, our orders from international market have reduced since the latter half of the year, however, the developments of the domestic market and the downstream products made up for the vacancy. We think that it is hard to survive in this market only relying on the extensive product of magnesium alloy ingot, it is necessary for us to work hard on developing downstream products and carrying out the way of deep processing.

Asian Metal: In the view of magnesium alloy export in 2014, the export volumes continued to drop, demand from consumption regions mainly in Europe dropped greatly, the application of the alloy is hampered or even weakened, do you know the reason? How do you think of the export market trend in the first half of 2015?

Han: Firstly, the overall global situation, especially the EU economic situation was dim resulting in the poor automobile market. Secondly, the magnesium metal and magnesium alloy were in over supply in China. I think the export market in the first half of 2015 will be improved.

Asian Metal: As the products of magnesium alloy die-casting, extruding and various types of precision mould processing from your company occupy a certain market share in the market, how are these products going in production and transaction in 2014 over the previous years?

Han: The die-casting and extruding of magnesium alloy belong to magnesium alloy deep processing, which is the development direction of magnesium alloy industry. It is based on magnesium alloy deep processing that Kang Mei could survive and develop in this industry. Currently, our market share of magnesium alloy electric wheel hub, bicycle frame, textile machinery, construction machinery and radiator is becoming larger and larger.

Asian Metal: Do you have any plan to R&D some other new products? What is your development planning for both short term and long term?

Han: An R&D new product is the driving force for the company’s development. We have passed the certifications of national secrecy and military specification in 2014, besides the development of products for civilian use; we also have marched into the market of military products. Currently, we have undertaken the manufacture and development of military tasks, which is also one of the key work in this year.

Asian Metal: Thank you very much for joining us for the interview. I hope your company enjoys a bright future.

Han: Thank you!