CCM: Anhui Jinhe solidifying leading position in AK market 07-05-2016

On 29 March, 2016, Anhui Jinhe Industrial Co., Ltd. (Anhui Jinhe) released its full-year 2015 financial report. Accordingly, large growths were achieved in its financial figures:


Sales: USD501.25 million (RMB3.33 billion), up by 3.52% YoY

Net profit: USD33.20 million (RMB214 million), up by 28.87% YoY


Anhui Jinhe's financial performance, 2011-2015


Source: Anhui Jinhe Industrial Co., Ltd.


Anhui Jinhe attributed the financial rises to the increased sales of fine chemicals. For instance, its sales of acesulfame-K (AK) reached USD36.28 million (RMB234 million), up by 7.68% YoY. The corresponding gross profit margin was 28.29%, up by 12.13 percentage points. Such growths can be further ascribed to:


Stably rising price: the averaged quoted price by Anhui Jinhe was up from USD4,335-4,645/t (RMB28,000-30,000/t) in 2014 to USD5,110-5,419/t (RMB33,000-35,000/t) in 2015


Technological reconstruction and subsequent cost reduction: the cost for AK was down by 7.9% YoY to USD26.02 million (RMB168 million). Accordingly, the company has been capable of self-supply of sulphur trioxide and acetyl ketene (both key raw materials for AK), and has achieved the yield rate of 68%+, a leading level in the industry


Significantly increased sales volume: the figure was around 8,000 tonnes, up by 14% YoY


In 2015, Anhui Jinhe, reliant on its cost advantage, consolidated its leading position in the AK segment, which offered it more sales channels and helped strengthen its price bargaining ability, according to analyst CCM. Specifically, the company occupied 60% of the global AK sales, up by 17 percentage points YoY, and became the largest AK supplier in the world.


On the contrary, its strongest competitor, Suzhou Hope Technology Co., Ltd. (Suzhou Hope), due to capital pressure, had been trapped in bankruptcy and reorganisation since Feb. 2015 and until Nov. it began to gradually resume the production and operation. During this period, Anhui Jinhe seized the opportunity to expand the market shares.


Anhui Jinhe's financial performance by AK business, 2011-2015


Source: Anhui Jinhe Industrial Co., Ltd.


Market share of AK in the globe, 2015


Note: Anhui Jinhe stands for Anhui Jinhe Industrial Co., Ltd.;
         Suzhou Hope stands for Suzhou Hope Technology Co., Ltd.;
         Celanese stands for Celanese Sales Germany GmbH;
         Beijing Vitasweet stands for Beijing Vitasweet Co., Ltd.
Source: CCM


In 2016, Anhui Jinhe will continue expanding its sweetener business. In particular,

- AK
“We will continue giving full play to our cost advantage and adopting low-price strategy to solidify the leading position in the market,” is a claim by Anhui Jinhe.


According to CCM’s research, its competitor, Suzhou Hope is still under heavy capital pressure and is at a fairly low level regarding its production and sales rates. “Its monthly output and shipment are 200 tonnes (vs. production capacity at 800 tonnes per month) and about 100 tonnes respectively,” disclosed an industry insider, “If Anhui Jinhe continues its low-price strategy, this undoubtedly will exert greater pressure on Suzhou Hope. However, it is really a chance for Anhui Jinhe to improve its market position.”


- Sucralose
Anhui Jinhe intends to accelerate its technological upgrading for its 500 t/a sucralose project, with an intention to achieve the output value of USD15.62 million. In addition, it has a plan to advance the construction of its 1,500 t/a sucralose project based on the upgraded production technology.


The company began conducting technology R&D for the sucralose production in 2014, and then in Aug. 2015, it finished the construction of the 500 t/a sucralose project. Now the project is under equipment debugging, expected to officially put into operation within H1 2016.


This article comes from Sweeteners China News 1604, CCM




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. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.


Tag: AK  sweetener  Sucralose


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