Chinalco Asset Implemented Shareholding Reform

After 3 months’ busy preparation, on March 29,the unveiling inauguration ceremony of Shanxi Chinalco Industrial Service Co., Ltd (“Shanxi Chinalco Industrial Service”) was held at Shanxi Aluminum Plant, making it the first subordinate enterprise to finish shareholding reform after the founding of Chinalco Assets Operation & Management Company(“Chinalco Assets”). The setup of this company signifies that Chinalco Assets has made a substantive move toward quickening the pace of promoting reform of subordinate enterprises,improving enterprise legal person governance structure, and fully releasing enterprise growth vitality.

Since the founding of Chinalco Assets, as Chinalco’s reform special zone and pilot field,based on Chinalco’s requirements on enforcing comprehensive in-depth reform, building reform special zone, creating dynamic enterprise, and fulfilling leap forward development, it actively drove forward all work tasks. In particular, after the opening of the Third Plenary Session of the 18th CPC Central Committee, in the aspect of deepening reform of subordinate enterprises, it regarded introducing or expanding shareholding by the management, staff, and external investors,implementing shareholding reform of subordinate enterprises, and fulfilling shareholding diversification as the main reform directions.

The predecessor of Shanxi Chinalco Industrial Service is Jinlu Jianan Company. This company is a wholly owned subsidiary of Shanxi Aluminum Plant, with net asset of over 20 million yuan, and 1000 plus registered employees, it boasts relatively advanced equipment and strong technological ability in equipment inspection and repair, manufacture of non-standard equipment, processing of spare parts, and building installation. Over the past several years, this enterprise has initially“walked out” to take part in market competition, in 2013 it fulfilled business income of 435 million yuan, profit of over 9 million yuan, overall speaking the enterprise is stable in operation performance, and has initially developed the trend of foreign orientation. Nevertheless, as the enterprise developed, Jinlu Jianan gradually met development bottleneck problems such inflexible system and mechanism, low employee income, inability to share fruits of enterprise reform, low work initiative; poor brand reputation, weak momentum to develop follow-up markets, and inadequate ability and motivation to seek further development,consolidate and expand the enterprise. There is an urgent need to activate new vitality in the enterprise through reform, for this reason it became one of the first batch of enterprises scheduled by the Chinalco Assets for focused efforts to implement shareholding reform.

Since the beginning of this year, Chinalco Assets formally kicked off the shareholding reform of Jinlu Jianan Company. After the kickoff of this work, thanks to effective policy propaganda, officers and employees of Chinalco Assets, Shanxi Aluminum Plant and Jinlu Jianan developed high level of consensus.In a public opinion survey, nearly 90%employees of Jinlu Jianan expressed confidence toward the enterprise’s future development, and indicated their support to the enterprise in implementing shareholding reform, and the willingness to stay with the enterprise to seek development and embrace the future.

The extensive and positive support of the majority of officers and employees became the decisive factor to enable the completion of shareholding system reform in the enterprise.After reform, Shanxi Chinalco Industrial Service has a registered capital of 50 million yuan, with shares held by Chinalco Industrial Service Co., Ltd, a subsidiary of Chinalco Assets; meanwhile, it absorbed employees to hold shares, employee shareholding accounts for 14% of total shares. The new company after the reform will change into a state holding company, with standardized legal governance structure, which enables it to become a legal person entity with independent accounting,clear-cut rights and responsibilities, flexible mechanism, and scientific management.

The newly established Shanxi Chinalco Industrial Service boasts Class Two Qualification for smelting, mining,electromechanical engineering construction and building construction general contracting, Class Two Qualification for steel structure, anti corrosion and insulation, installation of lifting equipment, furnace kiln, environmental project professional contracting as well as other multiple professional qualifications. After completing restructuring reform, Shanxi Chinalco Industrial Service will fully unleash enterprise vitality, through employee shareholding, bring out employees’ subjective initiative, and fulfill mutual development for both enterprise and employees; it is expected in 2014, enterprise’s profit standard will experience significant improvement on the basis of 2013; according to the enterprise’s development plan, by 2016, this company will fulfill 1 billion yuan in business income,several dozen million yuan in profit, the contribution percentage of external market in enterprise performance will reach above 60%,annual growth rate of employee salary income is above 10% with a certain level of dividend distribution.

It has been learned that in the next step,Chinalco Assets will further quicken the pace of shareholding system reform for its subordinate enterprises. In the near future,Henan Aluminum Luoyang Aluminum Processing Factory, and Luoyang Aluminum Foil Factory will introduce employee shareholding to finish shareholding reform; in April it will also implement reform in other enterprises including Changcheng Changxing Industry, Pingguo Aluminum Supervision Company, Shanxi Aluminum Plant Design Institute and Huanghe Electrical Appliance.