In Jan. 2016, Shanghai 3F’s Changshu Tetrafluoro Plant was checked for acceptance. In addition, its subsidiary in Changshu City also finished the EIA for CFC-113a and CFC-113 project. All of this signalised that Shanghai 3F is continuously promoting the production scale upgrading in Changshu.

On 22 Jan., 2016, the Jiangsu Changshu Advanced Materials Industrial Park (AMIP) announced the completion of the acceptance check of Shanghai 3F New Materials Co., Ltd. (Shanghai 3F)’s Changshu Tetrafluoro Plant.

Accordingly, Shanghai 3F noted the relocation of all its polytetrafluoro ethylene (PTFE) production capacity from Shanghai to Changshu in April 2015, and the reconstruction and expansion of the Changshu Tetrafluoro Plant, which mainly involved 2 sections, namely tetrafluoroethylene (TFE) and PTFE respectively.

1. TFE: capacity increased from 3,500 t/a to 5,500 t/a, and a new TFE production line (11,000 t/a) established
2. PTFE:

Ÿ   Capacity of suspension PTFE expanded from 700 t/a to 1,000 t/a, and a new production line (5,800 t/a) constructed

Ÿ   Original emulsion PTFE production line shut down, and a new production line (2,000 t/a) launched

Ÿ   A new dispersion PTFE (3,000 t/a) production line built

Early in mid-Jan. 2016, AMIP also announced the environmental impact assessment (EIA) results of the 1,1,1-trichlorotrifluoroethane (CFC-113a) and 1,1,2-trichlorotrifluoroethane (CFC-113) project constructed by Shanghai 3F’s subsidiary, Changshu 3F Fluorochemical Industry Co., Ltd.

When this project is finished, its CFC-113a will be supplied to Changshu 3F Zhonghao New Chemical Materials Co., Ltd. (Changshu Zhonghao).

This is mainly because Changshu Zhonghao and Chemours Company (Chemours) partnered in technology and jointly constructed a new generation hydrofluoroolefin, 1,1,1,4,4,4-hexafluorobutene (HFO-1336mzz) project, which demands CFC-113a as raw material.
The HFO-1336mzz project has been launched since Nov. 2015.

The continuous advancement of these projects signalised that Shanghai 3F is constantly promoting its production scale in Changshu. Such business activities, according to CCM’s research, can be mainly attributed to the company's poor performance in recent two years.

In 2014, Shanghai 3F made a turnaround in its sales growth rate, from negative to positive, however only at 0.92%. Meanwhile, its net profit was down by 61.91% YoY. In Q1-3 2015, its sales growth rate was 2.86%, but its net profit was -USD11.51 million (RMB74.82 million).
Specifically, its main products, fluoropolymer and fluorine-enriched refrigerant, trapped in sluggish market, were priced low, generating largely decreasing profits. In Q1-3 2015, the corresponding sales were down by 20% and 10% YoY respectively. In particular, the cost of sales for fluoropolymer was higher than its sales. Loss continued!

Under this, it is undoubtedly that Shanghai 3F transferred and expanded its PTFE production capacity and cooperated to launch the HFO project, which is expected to contribute to its financial performance.

First, the transfer of PTFE production capacity from Shanghai to Changshu and the further technological construction and capacity expansion, will be beneficial to saving resources expenses (labour, water, electricity, etc.), enhancing controllability of business operation and finally achieving cost reduction and economic effect improvement.

In addition, the product from the HFO-1336mzz project constructed jointly with Chemours, shows zero in ozone depletion potential (ODP) and only 8.9 in global warming potential (GWP). It is mainly applied in foaming field, covering fridge, cooler, water heater and pipe insulation, now well recognised by the industry.

It is notable that this project is the first scaled HFO-1336mzz production line in China, expected to enable Shanghai 3F to be a forerunner of the industry and seize market opportunities.

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