 2013-09-30 |
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Reporter: Peng Xuan-yi
In the third quarter, the steady increase in plasticizer prices and the benefits of new production capacities have added operational momentum for downstream processing plants. Yongyu (1323) is leveraging China's urbanization policy and the completion of new facilities at the Rende plant to accelerate its operations. YC (4306), in addition to implementing a BOPP price increase strategy and launching its seventh BOPP production line, has expanded its total monthly production capacity by 20% to 15,000 tons.
Furthermore, ACHEM Chemical (1715) is addressing the high demand for PVC tape, with its Yangmei plant in Taiwan increasing its monthly production of PE blow films by 300 tons and coating lines by 3.6 million square meters. This will lead to a more than 10% growth in performance in the second half of the year compared to the first half. Meanwhile, the plastic and fabric manufacturer Shikun (4305) is dealing with rising electricity and material costs. Despite these challenges, the price increase for raw materials like PVC and DOP is moderating, and the company’s focus on small and medium-sized clients helps maintain stable operations.
Yongyu’s product line includes plastic bottles, straps, soft tubes, and caps, with recent efforts focused on developing high-margin cosmetic containers. To strengthen revenue potential, Yongyu is also developing eco-friendly materials and differentiating its products. The new facility at Rende provides advantages in catering to domestic demand in China and acquiring pharmaceutical packaging certifications, ensuring long-term operational capacity.
With rising oil prices, there is a growing atmosphere of price increases for BOPP in China, with an estimated 3-5% adjustment in the third quarter. YC’s seven BOPP production lines include four in Taiwan and three in mainland China. Analysts estimate a 20-30% year-over-year increase in operations for the third quarter.
YC believes that the increasing market demand in China and the gradual ramp-up of new production capacities will result in better performance in the third quarter, surpassing the previous quarter. ACHEM Chemical has invested 900 million yuan in producing new materials, adhesives, and pressure-sensitive tape products. The first product, PE film, has completed trial runs and is now in production. In the future, 60% of this production will be used internally for tape, while 40% will be sold to downstream customers, with cost benefits expected to become apparent in the second half of the year. |
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