CCM:Four titanium enterprises transfers equities 09-08-2016

On 18 March, 2015, four private titanium enterprises including Panzhihua Xudong, Panzhihua Yuanfeng, Panzhihua Yuantong and Panzhihua Yunda, collectively made their pronouncements of equity transfer or capital adding and stock enlarging at the Southwest United Equity Exchange. Heads of titanium enterprises told media that this was the only choice to get rid of the difficult time of the domestic titanium industry. CCM believes that mergers and recombination among titanium enterprises will do good to the industry. With the elimination of small and medium companies and increasing of industrial concentration, large domestic TiO2 producers will profit greatly from it and the international competitiveness of China's titanium industry will also be strengthened.


 

Source: Internet


On 18 March, 2015, four private titanium enterprises including Panzhihua XudongTitanium Co., Ltd. (Panzhihua Xudong), Panzhihua YuanfengTitanium Co., Ltd. (Panzhihua Yuanfeng), Panzhihua Yuantong Titanium Co., Ltd. (Panzhihua Yuantong) and Panzhihua YundaTitanium Co., Ltd. (Panzhihua Yunda), collectively made their pronouncements of equity transfer or capital adding and stock enlarging at the Southwest United Equity Exchange. Wang Yong, chairman of Panzhihua Yunda, expressed that his company is mainly specialized in producing titanium tetrachloride, which is used to produce TiO2 and titanium sponge. Yet, the continuously falling prices of TiO2 and titanium sponge as well as the market downturn, had made the company halt all its operation from June, 2014. Other companies' representatives also said that equity transfer and capital expansion is the only choice to help the company get away from the helpless and long difficult time of the domestic titanium industry.

 

Apart from these four enterprises openly expressed their hope of transferring equity and attracting capital investment, many small and medium companies, which were restricted by the market downturn, have stopped or reduced their production on TiO2 and titanium sponge. Looking back to 2014, due to the continuous falling price of anatase TiO2 in the domestic market and stable rigid demand from foreign markets, most small and medium anatase TiO2 companies have stopped or reduced their production. Though the price did rebound in March, 2015 because of the reduced market supply, those companies still have no clear plans to restart their operation. In terms of titanium sponge, production halts were more widespread. Even enterprises with a production capacity of over 10,000 t/a, like Fushun Titanium Co., Ltd. and Tangshan Tianhe Titanium Industry Co., Ltd., have suspended production. Small and medium titanium enterprises are suffering a lot from such industrial environment.

 

Yet, compared to small and medium enterprises, those leading companies enjoying cost advantages and broader profit margins owing to highly centralized production, show their stronger adaptability in the downturn period. Meanwhile, the reducing capacity of small and medium enterprises gives great opportunities for leading enterprises to increase their market shares even though the downstream market demand would not grow rapidly at present.


 


Shutdown or reducing production of majorities of small and medium TiO2 enterprises actually help leading enterprises to realize double harvests in their revenues and net profits. Henan Billions Chemical Co., Ltd., for example, gained a revenue of USD335.58 million (RMB2.06 billion) with a YoY increase of 19.77% and gained a net profit of USD10.27 million (RMB63.14 million) with a YoY increase of 167.82%. Additionally, it is said that Sichuan Lomon Titanium Co., Ltd., the largest TiO2 manufacturer in China, will further expand its capacity in 2015.

 

CCM believes that China's slowly growing macro economy and seriously excessive capacity of the titanium industry will be an impetus for frequent mergers and recombination in 2015. With the elimination of small and medium enterprises as well as increasing concentration of the titanium industry, more market capacity and more standardized market order will be established and that, will surely help those leading enterprises become beneficiaries. Furthermore, the progresses and strength improvement occurring in those enterprises means that China's TiO2 competitiveness will be further enhanced in the international market. 


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.

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