From: China Daily/huanqiu.com — SNTO Focuses on the Advantageous Industries of Aluminum Formwork and Aluminum Foil after Transformation and Upgrading

It is hard to believe that the new labels of SNTO, a company that has been deeply engaged in the aluminum industry for 20 years, would be “bacterial-resistant and fresh-keeping”, “black technology in the kitchen”, and “all-metal reinforced aluminum foil with titanium”.

SNTO, which has long been one of the top 100 private enterprises in Hunan Province, has been exploring transformation and upgrading since 2016 and has made clear its strategic development direction by 2022. Taking the two fields of food health and comfortable living as the starting points, SNTO, through Internet + new retail, will establish channels with businesses and consumers, launch multi-application scenario solutions, and create a more imaginative future for the sustainable development of enterprises.

SNTO carries out transformation and upgrading not only to seek development but also to adapt to the times.

Recently, SNTO disclosed its transformation and upgrading ideas, saying, “Boosted by e-commerce and new retail and driven by innovation, SNTO focuses on the advantageous industries and products of aluminum formwork and aluminum foil, and seizes the market with high standards, high quality, and high value, striving to ensure that Chinese people can eat healthier and live more comfortably.”

Dilemma of diversification

Twenty years ago, Li Ruishi, a hydropower management expert, founded SNTO. This electrolytic aluminum enterprise filled the gap of no large aluminum factory in Hunan, the hometown of non-ferrous metals in China, as soon as it was established.

At the beginning of its establishment, SNTO, different from other similar companies, adhered to innovative development. Based on the accurate prediction of the industry and market, Li Ruishi chose to engage in the innovative electrolytic aluminum industry, and SNTO stood out with its high-level intensive processing.

Li Ruishi once said, “Scale expansion leads to more price competition and excess production capacity while intensive processing and new services will generate more added value and create more social value.”

The development path has put forward higher requirements on capital, technology, and talents. Over the past 20 years, SNTO has never stopped pursuing innovation, invested no less than 5% of sales revenue in R&D every year, built its own R&D institutions and R&D teams, applied for more than 1,500 patents, and participated in the revision of more than 10 national and industry standards. SNTO has successively won the titles of “National Technological Innovation Demonstration Enterprise”, “Top 500 Chinese Enterprises for Patent Strength”, and “National High-tech Enterprise”.

As the “pioneer” in the aluminum processing industry in China, SNTO has made fruitful efforts in promoting the green and sustainable development and reform of the aluminum industry. During trial and error, SNTO has successively entered more than 20 industries and has developed nearly 100 products such as subway profiles, all-aluminum buses, solar energy frames, electrical appliance housings, radiators, and aluminum trays, forming a diversified layout of the matrix of high-end products such as building formwork, aluminum profiles, and aluminum foils, air-conditioner foils, new nanometer materials, and lightweight automobiles.

By 2016, SNTO has become one of the three enterprises with a complete aluminum industry chain in China, established a light gauge foil production base ranking first in the country and even in the world, realized that the low-iron and low-silicon aluminum ingot accounts for more than 60% of the national market share, and has become the designated aluminum provider for the large aircraft projects in China and Toyota Motor. SNTO has developed the first aluminum lightweight coach in China and pioneered the use of pulling-on aluminum material for building in China. The market shares of air-conditioner foils and cast-rolling rolls are among the top in China.

While SNTO is developing fast, Li Ruishi is worrying about the future.

Chinese enterprises have experienced a long depression since 2016. There is a surplus of products on the market and it is difficult to sell them, so inventory has increased. But the cost is rising ceaselessly, a large number of enterprises lose money and lay off staff, even go bankrupt. Under the severe situation, SNTO has also been greatly impacted. If a company does not have competitive industries and products and only competes at low prices, it will not succeed.

Li Ruishi realized that 80% of SNTO’s exploration over the years is wrong. “We aimed to build SNTO one of the Fortune Global 500 enterprises, and SNTO has been a Fortune China 500 enterprise now. However, we need to change our minds now. We're not just looking to grow the company, we're looking to get bigger and stronger in specific areas. We need to be different from other companies.”

Transformation begins with simplification

Facing the complicated domestic and international economic situation, the deepening supply-side structural reform, and the increasingly strict environmental protection supervision, SNTO decided to take the initiative to carry out simplification. Li Ruishi, a former soldier, decisively stopped the non-core low-profit projects and focuses on the low-carbon and environmentally friendly industries and products.

In the first half of 2016, SNTO Changde Industrial Park completely shut down the Power Plant, Electrolytic Aluminum Plant, and Anode Plant.

Subsequently, in order to focus on building advantages and developing toward high-end manufacturing, SNTO successively shut down three industries of air conditioning foil, nanomaterials, and solar energy frames in 2017.

In this process, SNTO selected high-quality customers, fully explored the needs of customers, changed from simply providing products to providing comprehensive solutions, adjusted the sales policy, and took the lead in implementing “delivery after payment”. At the same time, by fully promoting a series of management changes such as simplification and efficiency improvement, product standardization, and co-creation of the Business Unit of Total Involvement, SNTO has developed steadily in the direction of health and sustainability and has always maintained its leading role in segmented fields.

However, SNTO’s goal is not simplification but transformation and upgrading. Therefore, SNTO has re-arranged its strategy and business model and started a new layout.

There is no doubt that China’s aluminum consumption has entered a stage of low-speed growth, and the core drivers have changed from scale expansion to technological innovation in application scenarios.

Everything goes back to the beginning. “Creating better products and services for customers” was the value and mission established by SNTO early on, and is now the inspiration for the new direction of SNTO.

Based on people’s yearning for a better life, SNTO focuses on two major competitive industries, namely, aluminum foil and aluminum formwork, from the perspective of food and housing. Among the two, aluminum foil is used for food preservation while aluminum formwork is used for housing condition improvement.

From businesses to consumers

SNTO started technological development in 2012 and has then become the leader in the aluminum alloy building formwork industry. The pulling-on aluminum material for building independently developed by SNTO has been applied in more than 6,000 buildings.

As the only enterprise in the industry with aluminum formwork system solutions for basements, office buildings, commercial complexes, residential buildings, schools and hospitals, SNTO, known as the “Huangpu Military Academy” in the aluminum formwork industry, has trained tens of thousands of elites in the design, installation, and R&D of aluminum formwork for the industry, promoting the popularity rate of aluminum formwork market from 1% to 30%.

R&D Director of SNTO said, “Our aluminum formwork is recyclable. The houses built are of good quality and watertight, with a low cost. The construction environment is clean and tidy, and no construction waste is generated. It is in line with the national policy of low-carbon, environmental protection, and green building.”

The aluminum foil developed by SNTO focuses on the food packaging market with great potential. The light-gauge aluminum foil is mainly supplied for businesses, selling to more than 70 countries around the world, and SNTO has become the main supplier of global food giants such as Tetra Pak, SIG, and Amcor.

Insiders of the packaging industry said that, from the perspective of the future development trend of the food packaging industry, high-end products will surely be packaged in aluminum foils. No other material can substitute aluminum foils when it comes to resistance, so they are the only choice for the packaging of green food.

In 2021, SNTO developed the light-gauge reinforced aluminum foil with titanium by adding titanium into the aluminum foil. The brand Shareal, launched with innovative ideas and technologies, changed the fresh-keeping mode of traditional food materials and entered the Customer-end market. The all-metal light-gauge reinforced aluminum foil with titanium can effectively isolate bacteria, light, and air, and has no plasticizer. With an antibacterial rate of 99%, it can extend the fresh-keeping time of food by 10 days.

At present, the product has successfully entered the high-end market of freshness keeping products in Tmall, Jingdong, Douyin, and other major e-commerce platforms, and its advertising was broadcast on CCTV 1 and CCTV 2 in prime time.

The Head of the E-commerce Department of SNTO said that Shareal will launch 8 new products such as bags and seals to strive to achieve an annual sales volume of RMB 1 billion.

Adhering to the strategy of energy conservation, pollution reduction, and low-carbon environmental protection, improving people’s eating and living experience through leading high-end manufacturing, and driving the improvement of China’s food packaging and construction quality are the ideal transformation and upgrading pattern of Li Ruishi, and also the ongoing industrial practices of SNTO.