(Yicai) Oct. 16 — Chinese aluminum product maker Shandong Nanshan Aluminum plans to spin off its Indonesian business and list it in Hong Kong to guarantee more convenient financing for its future development.

Nanshan Aluminum is expected to list Nanshan Aluminum Investment on the main board of the Hong Kong Stock Exchange, while continuing to maintain control over it, the Shandong province-based parent company announced on Oct. 13.

Nanshan International’s core assets are located in the industrial park of Bintan Island in Indonesia’s Galang Batang Special Economic Zone. They are engaged in alumina processing, production, and sales, Nanshan Aluminum said in a preliminary prospectus document for Hong Kong listing yesterday.

The spin-off will provide Nanshan International with an independent fundraising platform to meet the capital needs of the its own existing and future business expansion, thereby to provide sufficient financial guarantee for the future development of the Indonesian assets, according to the propectus.

Indonesia has been one of the most important sources of bauxite imports for Chinese aluminum smelting companies. However, since the Southeast Asian country banned raw ore exports in 2014, many Chinese aluminum product makers, including Nanshan Aluminum, have invested in or built local plants.

Nanshan Aluminum’s Indonesian alumina plant was completed and put into operation at the end of last year. The facility is expected to produce 1.8 million tons of alumina this year and reach its full capacity of 2 million tons next year.

In order to promote the deep processing capacity of Nanshan International, Nanshan Aluminum announced in April that it would invest CNY6.1 billion (USD833.9 million) to build an electrolytic aluminum plant with an annual output of 250,000 tons at its Indonesian production base. Expected to be completed and put into operation in the first half of 2026, the new plant will mainly supply products to the Association of Southeast Asian Nations and South Asian markets.

Shares of Nanshan Aluminum [SHA: 600219] were trading unchanged at CNY3.13 (43 US cents) as of 1.30 p.m. in Shanghai today.

Editor: Futura Costaglione