FNI acquires 20% of Chinese firm

MANILA, Philippines — Global Ferronickel Holdings Inc. (FNI) has sealed a deal to acquire a 20 percent stake in a Chinese ore value-added processor to boost synergy between the two firms, as well as support its diversification projects.

In a disclosure to the Philippine Stock Exchange yesterday, FNI said it signed a definitive agreement for the acquisition of 20 percent of Guangdong Century Tsingshan Nickel Industry Co. Ltd. (GCTN).

“The acquisition is expected to create reliable and consistent synergies between FNI as a nickel ore supplier and GCTN as a value-added processor, and support our ongoing diversification projects to boost profitability,” FNI president Dante Bravo said.

The company said this initiative would help manage risks, optimize value to stakeholders, and develop downstream integration of the value chain.

GCTN is a nickel alloy enterprise in China operating one of the world’s advanced smelters with rotary kiln-electric furnace (RKEF) technology in a 33-hectare facility employing over 600 employees.

The plant uses a rotary kiln technology that produces about 28,000 tons of pure nickel annually.

GCTN caters to customers in Guangdong’s economic and technological development zones and abroad.

The FNI management first proposed the acquisition of GCTN in May 2021, which was approved by its board more than a month after.

FNI, through its subsidiary Platinum Group Metals Corp. (PGMC), previously supplied medium grade saprolite ore to the Chinese company. The two companies first signed supply contracts in 2014.

To complement its expansion targets, FNI said it continues to pursue investments in high-growth firms and industries that can enhance operational and cost efficiencies.

FNI counts PGMC as a subsidiary and Ipilan Nickel Corp. (INC) as an affiliate. PGMC is a leading nickel ore producer, while INC just conducted its maiden shipment of nickel ore to China.

For this year, FNI targets 5.5 million wet metric tons (WMT) of production and export, composed of 60 percent low-grade ore and 40 percent medium-grade ore.

It projects that this target will likely be exceeded, weather permitting, as demand from China remains strong and nickel prices have been rising over the past years.

In the first semester, FNI reported a 34.9 percent drop in net income from P640.8 million last year to P417.4 million this year.

Revenues also slid by 15 percent to P2.21 billion due to lower volume of ore shipped.

The group encountered more rainy days this period totaling 128 rainy days compared to 105 rainy days during the same period last year.

It only managed to complete 19 shipments of nickel ore totaling 1.035 million WMT during the six-month period compared to 32 shipments totaling 1.74 WMT a year ago.

FNI is a diversified Filipino company with interests in nickel ore mining, logistics, cement and steel production, and port operations.