 2013-10-12 |
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Reporter: Peng Xuan-yi
Targeting the 30% annual growth in China’s PVC tape market, ACHEM Chemical (1715), a subsidiary of YC (4306) Group, is aggressively expanding its production capacity. The company is adding two new PVC production lines in the second half of the year, focusing on customized production to meet market demands, which is expected to boost performance and revenue.
ACHEM Chemical plans to build a new plant in Nantong, Shanghai, China, covering 300 acres with an initial investment of $60 million. The first phase will produce 150,000 tons of PVC tape per month, while the second phase will expand production lines for OPP (oriented polypropylene) tape. Additionally, ACHEM Petrochemical’s upstream production of acrylic acid in China is set to commence in February next year.
ACHEM Chemical's monthly production of PVC tape is approximately 21 million square meters. In September, the company reported consolidated revenue of 906 million yuan, a 31.38% year-over-year increase. For the first three quarters, revenue reached 7.84 billion yuan, up 4.56% from the previous year. Analysts estimate that operations in the second half of the year will grow by 10% compared to the first half.
YC Group’s tape production bases include locations in Taiwan, mainland China, and Vietnam. This year’s new production capacity includes 85 million square meters of OPP in Vietnam and additional capacities for hot-melt adhesives and PE protective films, with a new annual production of 20 million square meters. The new products are expected to enhance revenue structure. Additionally, YC’s seventh BOPP film production line is now operational, with a monthly capacity of 5,000 tons in mainland China and 8,200 tons in Taiwan. Due to rising oil prices, there is an anticipated 3-5% increase in BOPP prices in the third quarter.
YC and ACHEM Chemical believe that with the increasing market demand and the gradual ramp-up of production lines, the tape, film, and packaging distribution businesses are expected to maintain third-quarter levels, with profits projected to be strong. YC’s investment in ACHEM Petrochemical’s Shanghai Phase I project, which includes annual production capacities of 80,000 tons each for acrylic acid and butyl acrylate, and 20,000 tons for adipic acid, is set to begin production in February next year. |
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