Recently, three French steel foundries acquired by China’s Hangzhou Jinjiang International Group filed for bankruptcy. Many employees, led by trade unions, have been demonstrating for a year, denouncing Jin Jiang Group for not investing after the acquisition and for filing for bankruptcy after receiving a large subsidy from the French government.
Three French steel foundries acquired by China’s Hangzhou Jinjiang International Group have filed for bankruptcy, and the process for a new buyer will begin next week. The foundries’ union accuses the Chinese group of making the same acquisitions in France and not investing in their operations with care, but leaving with the money after receiving a large subsidy from the French government.
Hangzhou Jinjiang International Group acquired in 2017 the FVM foundry with 130 employees in Villiers-la-Montagne (Meurthe-et-Moselle) and the SAM foundry with 364 employees in Viviez (Aveyron), two entities that have been under court receivership for almost a year.
Hangzhou Jinjiang Group received approval from a French court in 2017 to acquire Sabart Aero Tech, an aluminum embryo manufacturing plant for the aerospace industry.(Twitter image)
The Jin Jiang International Group also acquired the 260-employee MBF aluminum foundry Back in April last year, faced with cash flow difficulties, the foundry underwent a settlement process with its creditors at the Dijon (Dijon) Commercial Court. However, on October 23, the settlement ended without an agreement, and on October 29, bankruptcy proceedings were filed with the Dijon Commercial Court for the foundry, which had issued a six-month receivership with an estimated debt of 7 million euros.
Ghislaine Gistau, a representative of the French General Union of SAM Foundry ( CGT), then confirmed to the press that “the factory makes muddy and electric engine parts, but the Chinese buyers have not invested and therefore cannot provide the company with the large machines needed to win the market.” According to Jisto, “the real problem is the strategy of the manufacturers, who, in order to increase their profits, are only interested in expanding their business locations abroad and not in investing in France.”
Between 1990 and 2000, the dieselization of the French automotive industry gave rise to many small foundries. These foundries faced a transition when France decided to develop electric cars, lacking sales channels. However, MBF employee Eric believes that the lack of diversification after the acquisition by Chinese conglomerates is the main problem. He said, “After buying the plants and receiving a lot of government aid, the Chinese group went back on its word and did not fulfill its promise to invest heavily to change the production of high-quality transformation products. The company’s management is also extremely conservative in its direction and completely uninterested in plowing ahead, similar to many examples of Chinese groups’ investments in France, and we still remember the negative example of the Chinese acquisition of the Toulouse Airport Group.”
Hangzhou Jinjiang Group’s acquisition of Sabart Aero Tech, a manufacturer of aluminum blanks for the aerospace industry, approved by a French court in 2017.(Twitter image)
The Chinese-owned Casil Europe Group (Casil Europe), in 2015, acquired 49.99% of the Toulouse-Blagnac airport group for 300 million euros.In early 2019, the Chinese-owned group dumped its stake in the airport, with the market price of the Chinese-owned stake assessed at 500 million euros, triggering an outcry in French politics as well as in public opinion. The local authorities’ public shares have always been dissatisfied with the way Chinese investors manage the airport, arguing that their business logic is entirely for their own benefit, disregarding the sustainable economic development of the local area, stressing that the Chinese investors are only using the airport’s cash reserves to maximize dividend payments, without investing in the airport’s operations. Some media even suspect that the Chinese investors are using the tactics of vulture funds that are profiteering in the international financial world.
Hangzhou Jinjiang Group, China’s 6th largest manufacturer in the aluminum industry, with environmental energy, non-ferrous metals and chemicals as its main businesses, was approved by a French court in 2017 to acquire Sabart Aero Tech, a manufacturer of aluminum embryos for the aerospace industry, in order to expand the production of high-quality aluminum products, with an expected investment of at least 40 million euros. The group believes that this acquisition will facilitate Hangzhou Jinjiang Group’s expansion into new markets.
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