Zhejiang Hailiang Co., a Chinese-based producer of copper tubes and rods, has announced plans to invest $288 million in building a manufacturing plant in Morocco.
According to a report from Bloomberg, the facility will focus on producing lithium-battery foil to export to Europe, America, the Middle East and Africa.
The decision comes amidst escalating geopolitical tensions between the US and China, which prompted Chinese companies to divert their production operations to other countries to bypass US sanctions on Chinese goods.
In a filing to the Shenzhen Stock Exchange on Tuesday, the Chinese company stressed the necessity of establishing a foothold in Morocco to better serve clients in regions where trade disruptions have become increasingly common, the Bloomberg report indicates.
Zhejiang Hailiang’s expansion into Morocco follows a pattern of seeking overseas markets as profit margins shrink domestically due to stricter regulations and mounting trade tensions with Western countries.
Last year, the company unveiled plans for a 50,000-ton lithium-battery copper foil plant in Indonesia. In addition, it already operates production bases in countries such as the US, Germany, France, Italy, Spain, Vietnam, and Thailand.
Once completed, the Moroccan facility is projected to churn out an impressive array of products, including 50,000 tons of alloy, 35,000 tons of pipe, 40,000 tons of rod, and 25,000 tons of foil annually. The construction phase is estimated to span 36 months.
Morocco’s strategic positioning with free trade agreements in place with major Western economies like the US, the European Union, and Turkey provides a favorable environment for Hailiang’s expansion plans. The project equally stands to benefit from the continent’s abundant copper deposits, ensuring lower raw material costs.
