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Net profit increase for 13 times, see how Huayou Cobalt in Tongxiang did that!

Media Report
Song Binbin Xia Dan Wei Yanfang Xu Xiaozhuo
Zhejiang Huayou Cobalt
2020/07/01 09:08
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“If there is no epidemic prevention measures for overseas companies in advance, if there is not persistent layout of the integrated industrial chain of our own, if there is no strategic partnership with the world’s leading enterprises, then today’s growth against the trend will be impossible!” A few days ago, the reporter came to the Zhejiang Huayou Cobalt Co., Ltd. in Tongxiang Economic Development Zone, talked about the first quarter of the year when the net profit of Huayou Cobalt increased for more than 13 times, Chairman Chen Xuehua shared his deep feelings.
Huayou Cobalt is as high-tech enterprise focusing on cobalt, copper refining and cobalt new material products deep processing, even under the impact of the epidemic, Huayou received a wave of good news, Huayue Ni-Co Hydrometallurgical project with a total investment of $1.28 billion was successfully started in Indonesia, an order with totally 7.6 billion yuan was obtained from a major Korean customer, the operating income reached 4.424 billion yuan, 0.53% up as of the same time last year, and net profit attributable to shareholders was 183 million yuan, increased for 1385.1% compared with the same time last year.
However, behind a series of exciting data, what kind of difficult moment did Huayou Cobalt experienced? And how did they reverse the crisis?
Overcoming all difficulties to stabilize production as the top priority.
Huayou Cobalt is the largest supplier of cobalt products in China, its special nature does not allow it to stop production at any time, gross profit fell for 80% last year driven by the lowered cobalt price. A series of production and investment plans made earlier this year were disrupted by a sudden outbreak of the epidemic.
In early February, a batch of cobalt raw material imported by Huayou Cobalt was about to arrive at the port. Due to the epidemic prevention and control, this batch of raw material could not apply for the certificate of origin in DRC for the time being, which meant it could not enter the factory even when it arrived at the port. “It arrived at our gate, but we could not get it in, this made us very anxious.” Yuan Jin, the head of Raw Material Procurement Department of Huayou Cobalt, she said, once this batch of raw material is detained in the port, only one we can not enjoy more than 90 thousand yuan of tariff exemption, but also the production will be heavily delayed. The most serious problem could possibly be production stalled for short supply and crystallization may occur in the pipelines and explosions may follow.
As a contingency plan, Huayou sought assistance from Jiaxing Customs under the domain of Hangzhou customs. After Huayou proposed, Jiaxing customs immediately contacted Huayou for details, a special green channel was opened and provided remote guidance for Huaoyu to make paperless application through “Customers over the Internet”. Meanwhile, the customs also pre-reviewed the documents in advance on the same day when all documents were handed in. Finally on February 19, Huayou got the pre-decision certificate of origin qualification from Hangzhou Customs, the first batch of 898 tons African raw material was smoothly imported and immediately put into production.
Committed to innovation to build a social circle of leading enterprises
Huayou-Posco Energy Company is located in Tongxiang Economic Development Zone, with its newly executed production of power battery NCM precursor in March, it won the 3- year long-term order from Posco Group who is a Top 500 enterprise with a total amount of 7.6 billion yuan. Now, several power battery NCM precursor production lines are running at full capacity. After being qualified by, all products will be exported to Posco in Korea, and the products will be applied to the world’s famous car companies such as Renault and Nissan Alliance, Volvo and Ford.
As a leading manufacturer of steal in Korea, Posco is convinced that Huayou Cobalt has the advantage of stable cobalt resources and other li-ion battey material supply. Two years ago, the two parties set up the strategic partnership and established two joint ventures Huayou Posco and Posco Huayou, to start production of NCM precursors and cathode materials.
“Li NiCoMn oxide, is the key material in a NCM battery, the precursor is the basic raw material of NCM, its quality directly determines the physicochemical index of the NCM cathode material.” Deputy manager of Huayou Posco New Energy Company, Jiang Zhonghai said with confidence. After the NCM precursor project with annual output of 30,000 tons was put into production, all products will be applied to the core of world renowned car companies’ supply chain. This will provide Huayou a good opportunity to transform itself to be a leader in the Li-ion battery new energy material industry. The alliance of leading enterprises will guarantee all partners’ steady development. Huayou is committed to creating a Li-ion new energy industrial ecology by integrating Co-Ni resource, refining, NCM precursor, and cathode material production to further enhance the added value.
Only the constant innovation will not fall behind of this others. Huayou has developed a seires of new products in the non-ferrous industry, new energy industry, and other sectors. Huayou’s high Ni content material have entered LGC, BYD and other important customers as well as the automobile industrial chain. The non-ferrous industry sector has successfully developed multiple models of cobalt tetroxide high-voltage new products, achieving a major breakthough in 4.45V high-voltage cobalt new materials. Under the influence of multiply factors, such as the long-term improvement of new energy vehicles and 5G industry, and the failure of existing material technological breakthrough and limited resource supply, Huayou Cobalt has a broad market prospect in Li-ion new energy and cobalt new material industry.
Global layout secures an effective whole industrial chain.
At the site of Huayue Ni-Co hydrometallurgical project in Indonesia, more than 1400 Mu mountainous areas have been leveled, more than a dozen excavators are running at full powder, and more than 300 workers are working hard to seize the construction period. In one year, a modern manufacturing base will rise from the ground.
This is a major project newly started overseas in March, with a total investment of 1.28 billion US Dollars. The project adopts the most advanced 3rd generation pressurized leaching process in the world and refines NI and Co hydroxide from laterite ore, which has multiply advantages such as low cost and environmental protection.
“The combination of Indonesian rich nickel resources and Huayou’s advanced hydrometallurgical technology will maximize the value through the breakthrough of sulfuric precipitation technology” Gao Baojun, general manager of Huayue Nickel Cobalt (Indonesia), said that this project carries the mission of Huayou to start a business for a second time. After the project is put into production, it will produce 60,000 tons of nickel metal a year, which will help Huayou to build an industrial chain of Li-ion material industrial chain from refining to material processing. 
The project can be advanced as scheduled due to the early deployment of Huayou. When the outbreak occurs at home, Huayou prepared for the worst. If an outbreak occurs globally, it will surely lead to a result that all enterprises will be shut down. So, Huayou headquarters formulated a whole set of epidemic prevention plans, and distributed to employees through various forms. During the epidemic, it was clear to standardize the operation of employees on their way to work, entering the company dining hall and other venues. By applying this standard to Tongxiang, Quzhou, Africa and Indonesia to closed the door to the epidemic.
As a large multinational enterprise, since the outbreak of the epidemic, its production has been uninterrupted and kept at full capacity with its layout of the whole industrial chain. “Put the core part in China and do manufacturing extensions abroad.” Chen Xuehua said. As Huayou industrial chain integration strategy advances steadily, it will embrace the harvest period gradually.
At present, the upstream project of Huaou’s industrial chain, the Lukini Solvent Extraction and electro-winning copper project in DRC has achieved production, the construction progress of Indonesian Ni-Co hydroxide project has been steadily advanced, upstream resource has been further guaranteed, downstream Huajin and Huayou-Posco’s precursor projects have been put into production, the added value of products and the stability of sales channels continue to improve in the future, with the new demand brought by new energy vehicles and 5G commercialization, the prospect of enterprise is much more predictable.
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