A Chinese Aluminum Company’s Learning Curve in the US Market

October 31, 2013

In late 2012, a 600,000-square-foot, $160 million aluminum extrusion facility commenced operations in Lafayette, Indiana. Owned by a Chinese company, Nanshan Group, the project took approximately two and a half years from inception to launch of production and marked the first greenfield investment by a major Chinese metals producer in the US market.

Nanshan considered the investment
 to be a strategic venture, not simply a commercial one aimed at generating quick profits. And it settled
 on a heartland 
state—Indiana—
that was eager 
to attract and accommodate foreign investment, part of a wave of traditional US manufacturing states that had aggressively courted investments from Asia. For these reasons, the Nanshan case offers a useful lens through which to examine the broader phenomenon of Chinese greenfield investment in the United States.

What follows is a detailed account of Nanshan’s origins and ambitions to enter an advanced market. The case study analyzes Nanshan’s choices and rationales in looking to Indiana. It concludes with a look at the challenges Nanshan still faces as it seeks to prosper in the American market.