Henan
Billions released its 2015
financial report last month, which showed that the company had achieved great
YoY growth in both its total revenue and net profit and managed to rise amidst
the general recession in the industry. This is because the company’s industrial
structure transformation projects have gradually reached the designed capacity
and because it has good control over production costs, according to CCM.
On
27 Feb., 2016, Henan Billions Chemicals Co., Ltd. (Henan Billions)
released its 2015 financial report, which showed that the company achieved
-
a
revenue of USD403 million (RMB2.64 billion) in 2015, up by 28.43% year on
year
-
a
total profit of USD20.80 million (RMB136 million), up by 85% year on year
-
a net
profit of USD16.98 million (RMB111 million), up by 76.49% year on year
It is worth noting that its sale volume reached 228,600 tonnes in 2015, up by
25.85% over that in 2014, of which domestic sales of TiO2 were
131,700 tonnes, up by 41.35% year on year, and exports 96,900 tonnes, up by
9.53% year on year.
2015 witnessed a slowdown in the Chinese economy, a short supply in the
downstream market of the domestic TiO2 industry, and a decrease in
exports for the first time in recent years. Under these circumstances, the TiO2 price on the domestic market plunged to an all-time low. The price of
sulfate grade rutile TiO2 stood at USD1,449.52/t
(RMB9,500/t) in late 2015, causing many producers to operate at a loss. Of the
other A-share listed TiO2 companies that have released their
financial reports, both Anhui Annada Titanium Industry Co., Ltd. (Anhui Annada)
and CNNC Hua Yuan Titanium Dioxide Co., Ltd. (CNNC TD), which
obtained small profits in 2014, suffered from net losses of hundreds of
millions in 2015.
Under the same bleak conditions, Henan Billions, with a 76.49% increase in net
profit in 2015, contrasts starkly with CNNC TD, Anhui Annada, and other
major domestic producers. This is mainly because Henan Billions’ industrial
structure transformation projects have gradually reached the designed capacity
in 2015 and because it has good control over production costs and a variety of
marketing strategies, according to CCM.
1.
Key projects of high-end transformation of product structure gradually reached
design capacity
In
2015 the high-end capacity TiO2 production lines Henan Billions had
previously constructed were gradually put into production.
In relation to sulfate grade TiO2, Henan Billions declared that, in
collaboration with the Sherwin-Williams Company, it had developed BLR-696, and
also independently developed BLR-688 and BLR-681 specially for plastics, which
were all recognized by key domestic clients such as LESSO Group and Jiangsu
Hongmei Plastics Color Concentrate Co., Ltd. In addition, Huntsman TR52 TiO2, a product acquired by Henan Billions which is used specially for printing ink,
became the principal product of the Huntsman factory in France, which smoothly
began operation in 2015, with a total sales volume of about 15,000 tonnes and
at a stable price of about USD2,371/t (RMB15,500/t) throughout the year.
In regards to chloride grade TiO2, Henan Billions successfully
developed BLR895 and BLR896 products in 2015, which were publicly appreciated
by PPG Industries, Inc. (PPG).
As for special TiO2 products, Henan Billions doubled its growth rate
in sales of denitrating and denitrificating TiO2 in 2015, and has
begun to prepare its new battery grade TiO2 for the market.
2.
Low costs bring profits
Henan
Billions has a robust titanium industry chain ranging from raw materials such
as ilmenite, high titanium slag and sulfuric acid, to TiO2,
processed rich grade titanium material (titanium slug or artificial rutile with
TiO2 content no less than 75%) and titanium gypsum etc. The
all-inclusive industry chain enables Henan Billions to assert substantial
control over production costs.
Henan Billions has strengthened the regulation of purchasing, production, sales
and logistics etc., and reduced production costs before tax from USD1,545.06/t
(RMB10,102.40/t) to USD1,444.40/t (RMB9,444.23/t). Released financial reports
show that Henan Billions’ gross profit margin in 2015 was 18.51%, almost the
same as that of the previous year, only up by 0.5 percentage points year on
year, but its net profit margin rose to 4.52%, up by 1.38 percentage points
year on year under the general condition of falling prices in China’s TiO2 industry.
3. Differentiated marketing strategies open sales channels
Henan
Billions' total TiO2 sales volume in 2015 was 228,600 tonnes, up by
25.85% year on year. Of that, domestic sales accounted for 131,700 tonnes, up
by 41.35% year on year, and sales for export totaled 96,900 tonnes, up by 9.53%
year on year, according to the financial report.
In domestic sales, Henan Billions, based on the market distribution and demands
from downstream industries, has allocated distribution personnel to take care
of market differentiation, actively promoted itself at large events related to
TiO2 downstream applications, such as China Coat Exhibition in 2015,
quickly improved the brand value of the company and realized a big increase in
revenue by acquiring Sichuan Lomon Titanium Co., Ltd., the domestic
leading enterprise in the industry.
In overseas sales, Henan Billions started using innovative marketing methods
such as consignment so as to expand its export business in 2015, and improved
its branches in Europe and America and got the operation on track in 2015.
About CCM:
CCM is the leading market intelligence
provider for China’s agriculture, chemicals, food & ingredients and
life science markets. Founded in 2001, CCM offers a range of data and
content solutions, from price and trade data to industry newsletters and
customized market research reports. Our clients include Monsanto,
DuPont, Shell, Bayer, and Syngenta.
For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailingecontact@cnchemicals.com or calling +86-20-37616606.
Tag: Henan Billions, TiO2