July 31, 2015

Wauconda, Illinois - Earlier this week a report surfaced on the Internet that contained a scathing series of allegations against China Zhongwang Holdings Ltd, which is reportedly the second largest extruder in the world. The report, from Dupre Analytics, contends that Zhongwang’s chairman, Liu Zhongtian, and his family have developed a “network of proxies and intermediaries outside of China, and used them to secretly set up entities and aluminum processing facilities that span the globe.” The report can be downloaded at http://dupreanalytics.com/reports/.

AEC Director of Operations, Jeff Henderson, said, “If proven to be true, these allegations make it clear that Zhongwang investment and penetration into North American and Asian markets has been built on a house of cards. Our industry has read about and seen the pictures of the one and a half billion pounds of extrusions that were shipped into Mexico only to be re-melted into billet. That program never made economic sense to anyone in the industry. How can it be profitable to convert ingot into billet, then extrude it, then ship it across the Pacific Ocean to Mexico only to re-melt into billet again? Many speculated about how and why such a program would work. Now, we read Dupre’s allegations detailing a level of deception and fraud that no one could have ever imagined. Furthermore, we learn in this report that the Mexican operation is just one of many such programs.”

The Aluminum Extruders Council calls on the governments of the People’s Republic of China, Vietnam, Malaysia, Mexico, and the United States to investigate these charges. If these allegations are found to be true, these governments must take all necessary steps to end these schemes and bring the Liu family to justice. We believe the United States government must take behavior like this into account as it negotiates new trade agreements with Pacific Rim nations. Already, transshipments of aluminum extrusions have been uncovered and successfully prosecuted in two cases involving Malaysia. It is time that our government confronts these countries in an effort to cooperate in current and future negotiations.