Zhejiang Yonghe to build high-end fluorine material project 02-07-2024

Summary: In early Jan. 2024, Zhejiang Yonghe announced to set up a high-end fluorine material technical renovation and expansion project.

On 3 Jan., 2024, Zhejiang Yonghe Refrigerant Co., Ltd. (Zhejiang Yonghe) announced that it would build a 3,000 t/a polytetrafluoro ethylene (PFA) and 500 t/a perfluoropropylvinyl ether (PPVE) expansion and 40,000 t/a difluoromethane (R32) technical renovation project within the plant site of its subsidiary, Shaowu Yonghe Jintang New Material Co., Ltd. (Shaowu Yonghe), with an investment of USD39.42 million (RMB278.95 million). This project contains the following contents:

  • Adding 3,000 t/a PFA equipment;
  • Expanding the PPVE capacity by 500 t/a based on the original PPVE equipment;
  • Adding capacity of 44,000 t/a difluorochloromethane (R22) to the existing 40,000 t/a R32 equipment through technical renovation.
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    This project adapts to the high growth of the demand in China. In recent years, demand for PFA, especially high-purity PFA, has rapidly increased as the focus on production and consumption of the semiconductor industry moves to China. However, currently, China's PFA production capacity is mainly concentrated in the low-end sector, and high-purity PFA mainly relies on imports. Therefore, domestically produced high-purity PFA has broad growth potential.

     

    This project is also related to the performance pressure of Zhejiang Yonghe to certain extent. According to the 2023 semi-annual report of the company, in Jan.–June 2023, Zhejiang Yonghe achieved net profits of USD15.54 million (RMB110.04 million). Based on the company's financial data in 2022 and in H1 2023, Zhejiang Yonghe's revenues of fluorocarbon chemicals accounted for 54.13% of the total as of 30 June, 2023, but gross profit margins of this sector dropped to 9.38% in 2022 and further slipped to 9.16% in H1 2023. Besides, Zhejiang Yonghe's Q3 2023 report presented that in Q1–Q3 2023, net profits attributed to shareholders of the listed company went down by 28.86% YoY to USD7.35 million (RMB52.00 million). Similarly, Zhejiang Sanmei Chemical Industry Co., Ltd.'s revenues of the refrigerant sector occupied 78.80% of the total but net profits attributed to shareholders of the listed company decreased by 48.45% YoY in Q1–Q3 2023. At the same time, Zhejiang Yonghe's fluoropolymer sector showed a tendency to improve in 2022 and the gross profit margins of this sector climbed by 10.74% to 37.52% compared with 2021 and this growing trend continued in H1 2023. Zhejiang Yonghe said that fluoropolymer sector has a larger contribution to its profits.

    Source:CCM


    More information can be found at CCM Fluoride Materials China Monthly Report.


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