CCM: Zhejiang Juhua raises USD479.16 million 10-10-2016

On 22 Sept., 2016, Zhejiang Juhua Co., Ltd. (Zhejiang Juhua) announced that it had finished the private placement of 300,750,282 A shares and had raised a sum of USD479.16 million (RMB3.20 billion).



Source: Baidu


Specifically, the targets included Yuan Zhimin (president of Kingfa Sci. & Tech. Co., Ltd.), Zhejiang Salt Industry Holdings Co., Ltd., Zhejiang Tourism Investment Limited Company and Juhua Group Corporation. Following this subscription, the first 3 have been listed in the “top10 shareholders”, and Yuan Zhimin especially became the 2nd largest one by subscribing 120,300,751 shares at USD191.66 million (RMB1.28 billion).


This private placement, according to analyst CCM, is favourable for Zhejiang Juhua to enlarge its assets scale and improve its financial conditions. In addition, Zhejiang Juhua will make full use of the sum to construct new projects, which are expected to help optimise the business / product structure, and enhance its competitiveness, sustainability and comprehensive capability.


In particular, the sum will be invested into:

  • Premium-marketed fluorochemicals: to give full play to its advantages in infrastructure, production scale and production technology, so as to enrich its product mix and consolidate its leading position in domestic fluorochemical industry


  • Chlor-alkali chemicals: to tightly combine this business with fluorochemical business, so as to achieve synergistic growth; to level up its position in polyvinylidene chloride (PVDC) segment, and expand its product range, so as to achieve differentiation


  • Electronic chemicals: to carry out business activities in special gas and electronic gas fields, so as to achieve synergistic effect with its wet electronic chemical business, optimise product structure and create new source of profit growth

 

Polyvinylidene fluoride (PVDF) project


The portfolio spans PVDF resin for solar energy backplane membrane (4,000 t/a), PVDF resin for wire and cable (3,500 t/a), PVDF resin for water treatment membrane (1,000 t/a), PVDF resin for Li-ion battery adhesives (1,000 t/a) and PVDF resin for coating (500 t/a).


The project will contribute to the company’s capacity distribution, and development of premium marketed PVDFs, so as to achieve differentiated growth: the extension into downstream fields will create new source of profit growth for the company and improve its economic effect, since it will differ itself from domestic companies which run the business of PVDF mainly (= about 80%) for coatings.

 



Pentafluoropropane (HFC-245fa) project


The project consists of 2 phases, each capacity designed to reach 5,000 t/a.


Currently, HFC-245fa plays a vital role in substituting the traditional dichlorofluoroethane (HCFC-141b) foaming agent, as it boasts excellent property in environmental protection and enables the foaming agent to save more energy. Now the Chinese government is advancing the prohibition of using HCFC-141b in foaming agent, in 3 major downstream industries including refrigerator, electric water heater and refrigerated container, which suggests a broader market prospect for HFC-245fa.

 

2nd phase new fluorine-enriched materials project


The products include tetrafluoroethylene (TFE, 10,000 t/a), hexafluoropropylene (HFP 5,000 t/a), high-performance fluororubber (3,000 t/a) and modified polytetrafluoro ethylene (PTFE, 4,000 t/a).


Now China is increasing the demand for fluororubber and modified PTFE. Take automobile industry for example: in 2014, its demand for fluororubber and modified PTFE reached nearly 10,000 tonnes and 6,000 tonnes respectively, with AAGR of 10%+ both. According to CCM research, however, most of the manufacturers can only supply low and medium-marketed products, with reliance on imports of premium products. This can be seen in the modified PTFE in particular: about 80% are imported.


Hence, Zhejiang Juhua, equipped with fluororubber and modified PTFE production capacities, is expected to ease the dependence on import to certain extent and improve its market position and competitiveness.

 

Fluorine-enriched gas project


(1) 2nd phase high purity electronic gas project: the high purity electronic grade fluorine-enriched gas (500 t/a) especially, is mainly used for the etching and cleaning in integrated circuit (IC) and liquid crystal display (LCD) industries


(2) Fluorine-enriched special gas project: electronic grade nitrogen trifluoride (2,000 t/a) is mainly used for the cleaning in IC, LCD, solar energy, optical fibre industries and the cleaning of vapour deposition device; electronic-grade hexafluorobutadiene (50 t/a) is mainly for the etching of super premium marketed electronic industry such as super largescale IC.


In recent years, the Chinese government has been encouraging the development of emerging industries. Specifically, the energy saving and environmental protection industry, the information and technology industry, the premium marketed device industry and the alternative energy industry all strongly support the demand for electronic gas. However, domestic electronic gas industry is now severely weak in self-sufficiency and is strongly reliant on imports. In order to realise sustainable and healthy development, localisation of electronic gas is a necessity.

  

Zhejiang Juhua raises funds for projects, 2016

No.

Project

Capacity, t/a

Investment

1

PVDF project

10,000

USD84.30 million (RMB563 million)

2

1st phase high-performance PVDC barrier material project

32,000

USD80.11 million (RMB535 million)

3

HFC-245fa project

10,000

USD48.36 million (RMB323 million)

4

2nd phase new fluorine-enriched material project

22,000

USD81.16 million (RMB542 million)

5

1st phase high-purity electronic gas project

2,500

USD21.86 million (RMB146 million)

6

2nd phase high-purity electronic gas project

1,050;
4,000 bottle/a (gas mix)

USD17.97 million (RMB120 million)

7

Fluorine-enriched special gas project

2,050

USD119.79 million (RMB800 million)

8

Supplement to working capital

/

USD25.60 million (RMB171 million)

Note: PVDF stands for polyvinylidene fluoride;
         PVDC stands for polyvinylidene chloride;
         HFC-245fa stands for pentafluoropropane.
Source: Zhejiang Juhua Co., Ltd. & CCM

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

 

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