On 30 July, 2016, CNNC Hua Yuan Titanium Dioxide Co., Ltd. (CNNC TD) released its financial report for the first half of
2016 (H1 2016).
Source: Baidu
Key figures were:
-
Revenue: USD140.77 million (RMB933.42
million), up USD1.21 million (RMB8.03 million), or 0.87%, YoY
-
Total profit: USD1.98 million (RMB13.15
million), down USD3.25 million (RMB21.54 million), or 62.09%, YoY
-
Net profit: USD1.60 million (RMB10.58
million), down USD1.50 million (RMB9.97 million), or 48.51%, YoY
According to the report, in H1 2016, CNNC TD produced 104,800 tonnes (YoY up of
21.30%) of TiO2 and sold 83,300 tonnes (same level as in H1 2015); it also sold
10,800 tonnes of iron oxide, up 11.34% YoY.
"During the reporting period, our TiO2 price kept climbing and our sales volume
remained stable and showed an upward trend,' CNNC TD commented in regard to
their profits, "In addition, our board of directors, following a development
strategy of exploring markets, enhancing management and cutting costs, has been
continuously improving marketing, carrying out scientific research and
development, accelerating project construction and reducing sales costs.'
In H1 2016, the market price of TiO2 kept
increasing under the influence of the recovering real estate market and supply
side reform. However, it was still lower than in H1 2015. According to CCM's
research, the average market price of rutile TiO2 in H1 2016 stood at
USD1,526/t, down 10.76% YoY.
Based on this, it is understandable that CNNC TD recorded a YoY fall in net
profit. Notably, it managed to maintain stable production and sustain stable
revenue against depressed market conditions, reflecting its outstanding overall
strength among other companies. CCM believes that it will have a bright future
considering the advantages it holds in terms of its production technology,
business layout and circular economy.
1. Production technology
CNNC TD has built long-term partnerships with Ti-cons Dr. Jendro Und Partner
Management Consultants, Buhier AG, the Department of Chemistry of Tsinghua
University, and the Institute of Process Engineering of the Chinese Academy of
Sciences. It maintains strict quality control over its rutile TiO2 products and
continues to explore new applications for them in the coating, plastics and
color concentrate markets. In addition, it also provides diversified services
according to clients' requirements.
2. Business layout
CNNC TD has further optimized its business layout by making Jiangsu Province
the company's purchase center, Gansu, Anhui and Jiangsu provinces their
production bases, and Shanghai their sales center. In this way, the company
expects to utilize the logistics, information, and market advantages that
Jiangsu Province and Shanghai offer, as well as the labor and resource
advantages which Gansu and Anhui provinces provide. Such a multi-regional
distribution has significantly helped CNNC TD to reduce its production costs.
Meanwhile, in April 2016, CNNC TD set up a subsidiary named CHTI America Inc.
in the US. to further explore the global market.
3. Circular economy production mode
CNNC TD has outstanding circular production lines:
-
Waste acid generated during TiO2 production
is recycled after enrichment
-
The large amount of afterheat generated
during the production of sulphuric acid (by sulphur) provides heat for TiO2
production
-
Waste slag generated during TiO2 production
is used as a raw material for cement after processing
In addition, at the end of April 2016, CNNC TD established a wholly-owned
subsidiary named Baiyin Bojo New Material Co., Ltd., which will produce iron
oxide pigments using the large quantity of ferrous sulfate that Gansu Orient
Titanium Co., Ltd. (another subsidiary) generates during the production of TiO2,
hoping to reap profits and protect the environment at the same time.
This article comes from Titanium Dioxide China Monthly Report 1608, CCM
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Tag: Titanium TiO2