Top global producer of aluminum China Hongqiao plans to spend as much as RMB15 billion raising annual capacity by 15% in 2016 despite rampant overcapacity in the industry, South China Morning Post reported. The firm has insisted its expansion is feasible because it owns power plants and upstream materials production facilities that lower its production costs. But Hongqiao posted a 31.3% drop in net profit to RMB3.65 billion yuan for last year resulting from a 10% decline in average aluminum prices in China and sharply higher finance costs. 22.2% growth in revenue and a 39 per cent rise in sales volume to 4.12 million tons was not enough to offset the price drop.
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