Chinalco Northeast Light Alloy Co, which provides aluminum alloys to the aviation and defense industries, will spend more than CNY 5 billion to build a new plant as it tries to meet rising demand.

Beijing based Aluminum Corp of China in a statement said that construction of the 200,000 tonne a year alloy plant at Harbin n Heilongjiang province began on Tuesday and it is due for completion in 2011.

The plant will produce aluminum plates and strips widely used in the defense petrochemicals, transport and machinery industry. Chinalco Northeast expects annual profit of CNY 400 million and sales of CNY 7 billion once the plant is operational.

Mr Song Huaibin an analyst at Guoyuan Securities said the new plant is part of the nation's push to change its aluminum product structure and export more high value added aluminum products. He said that the nation's aluminum supply has exceeded demand this year.

Mr Song said however, the country currently imports some high end aluminum products and that might have been a key factor in the decision to build the new plant.

Mr Xiao Yaqing GM of Chinalco said the company supplies 80% of the aluminum alloys used in aircraft, atomic reactors, nuclear weapons, satellites and missiles for the defense industry. He said that the new plant is expected to boost production and create jobs in the region.