Source: Baidu

Previously, Juhua Group had held a 54.86% stake in Zhejiang Juhua; following this increase, it now holds 56.843% of shares, or 59.383% if the 2.540% stake held by Zhejiang Juhua Investment Co., Ltd. (in which Juhua Group is also the controlling shareholder) is included.

“Over the next 12 months (from 1 Sept. this year), we will continue to increase our shareholdings in Zhejiang Juhua by a cumulative figure of <=5% (incl. the 0.762% from this buy in),” noted Juhua Group.

It is Zhejiang Juhua’s business improvement strategy that is encouraging Juhua Group to continually increase its stake in the company. Specifically, it has successfully taken measures such as advancing asset optimisation, and constructing premium-marketed projects.

In H1 2016, Zhejiang Juhua made sales of USD742.69 million (RMB4.96 billion), up by 12.19% YoY; however, net profit for the corresponding period fell by 43.04% to USD7.30 million (RMB48.77 million). The key reasons for such a fall are slow macro-economic development and the still sluggish fluorochemical market, which has meant low fluorochemicals prices, following a close to 5-year period of adjustment.

Seeking to improve business development, Zhejiang Juhua has strategically taken the following measures:

1. Increased its market share by making production safer and more stable, enhancing market exploration, maintaining high levels of production and sales of leading products (incl. fluorine-enriched refrigerants and fluoropolymers), and phasing out low-efficiency production capacity within the industry through M&A and competitiveness.

2. Improved business by advancing the construction of key projects, including a 10,000 t/a polyvinylidene fluoride (PVDF) project, a 100,000 t/a high performance polyvinylidene chloride (PVDC) barrier material project, a 10,000 t/a perfluoropropane (HFC-245fa) project, a 23,500 t/a new fluorine-enriched materials project, and a high purity electronic gas project.

3. Developed a premium market and increased its technological capabilities by vigorously advancing the development of new technologies / products. For instance, the quality of its new PTFE filament fibre successfully met clients’ requirements; the quality of electronic grade hydrofluoric acid, electronic grade nitric acid, electronic grade hydrochloric acid, electronic grade ammonium fluoride and buffered oxide etchant (BOE) already reach "PPT grade" and have been successfully applied in the electronic chip field. It has also applied for 18 patents regarding electronic chemicals, 4th generation fluorine-enriched refrigerant, and new fluorine-enriched materials, of which 12 have been approved.

Notably, by ratifying the Montreal Protocol on Substances that Deplete the Ozone Layer, parties agreed to take control over hydrofluorocarbons (HFCs). An amendment to the treaty, which will reduce production and consumption of HFCs, is due to be finalised in Oct. 2016.

When China begins to introduce measures to reduce the production and consumption of HFCs, Zhejiang Juhua will inevitably be the first to be threatened. This is mainly because the company currently leads the domestic HFC market, with a portfolio spanning pentafluoroethane (HFC-125), 1,1,1,2- tetrafluoroethane (HFC-134a) and difluoromethane (HFC-32).

Fortunately, Zhejiang Juhua has already taken steps to mitigate harm and ensure continued profitability. It has actively conducted research on product applications which are aligned to domestic policies and international conventions, and carried out business activities related to 4th generation fluorine-enriched refrigerant and fluorine-enriched foaming agent.

In particular, the company applied for “A Preparation Method for 2,3,3,3-Tetrafluoropropene (HFO-1234yf)” PCT (= Patent Cooperation Treaty) patent in July this year. 

This article comes from China Fluoride Materials Monthly Report 1609, CCM

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