On 18 March, 2015, four private titanium
enterprises including Panzhihua Xudong, Panzhihua Yuanfeng, Panzhihua Yuantong
and Panzhihua Yunda, collectively made their pronouncements of equity transfer
or capital adding and stock enlarging at the Southwest United Equity Exchange.
Heads of titanium enterprises told media that this was the only choice to get
rid of the difficult time of the domestic titanium industry. CCM believes that
mergers and recombination among titanium enterprises will do good to the
industry. With the elimination of small and medium companies and increasing of
industrial concentration, large domestic TiO2 producers will profit greatly
from it and the international competitiveness of China's titanium industry will
also be strengthened.
Source: Internet
On 18 March, 2015, four private titanium
enterprises including Panzhihua XudongTitanium Co., Ltd. (Panzhihua Xudong),
Panzhihua YuanfengTitanium Co., Ltd. (Panzhihua Yuanfeng), Panzhihua Yuantong
Titanium Co., Ltd. (Panzhihua Yuantong) and Panzhihua YundaTitanium Co., Ltd.
(Panzhihua Yunda), collectively made their pronouncements of equity transfer or
capital adding and stock enlarging at the Southwest United Equity Exchange.
Wang Yong, chairman of Panzhihua Yunda, expressed that his company is mainly
specialized in producing titanium tetrachloride, which is used to produce TiO2
and titanium sponge. Yet, the continuously falling prices of TiO2 and titanium
sponge as well as the market downturn, had made the company halt all its
operation from June, 2014. Other companies' representatives also said that
equity transfer and capital expansion is the only choice to help the company
get away from the helpless and long difficult time of the domestic titanium
industry.
Apart from these four enterprises openly
expressed their hope of transferring equity and attracting capital investment,
many small and medium companies, which were restricted by the market downturn,
have stopped or reduced their production on TiO2 and titanium sponge. Looking
back to 2014, due to the continuous falling price of anatase TiO2 in the
domestic market and stable rigid demand from foreign markets, most small and
medium anatase TiO2 companies have stopped or reduced their production. Though
the price did rebound in March, 2015 because of the reduced market supply,
those companies still have no clear plans to restart their operation. In terms
of titanium sponge, production halts were more widespread. Even enterprises
with a production capacity of over 10,000 t/a, like Fushun Titanium Co., Ltd. and
Tangshan Tianhe Titanium Industry Co., Ltd., have suspended production. Small
and medium titanium enterprises are suffering a lot from such industrial
environment.
Yet, compared to small and medium
enterprises, those leading companies enjoying cost advantages and broader
profit margins owing to highly centralized production, show their stronger
adaptability in the downturn period. Meanwhile, the reducing capacity of small
and medium enterprises gives great opportunities for leading enterprises to
increase their market shares even though the downstream market demand would not
grow rapidly at present.
Shutdown or reducing production of
majorities of small and medium TiO2 enterprises actually help leading
enterprises to realize double harvests in their revenues and net profits. Henan
Billions Chemical Co., Ltd., for example, gained a revenue of USD335.58 million
(RMB2.06 billion) with a YoY increase of 19.77% and gained a net profit of
USD10.27 million (RMB63.14 million) with a YoY increase of 167.82%.
Additionally, it is said that Sichuan Lomon Titanium Co., Ltd., the largest
TiO2 manufacturer in China, will further expand its capacity in 2015.
CCM believes that China's slowly growing
macro economy and seriously excessive capacity of the titanium industry will be
an impetus for frequent mergers and recombination in 2015. With the elimination
of small and medium enterprises as well as increasing concentration of the
titanium industry, more market capacity and more standardized market order will
be established and that, will surely help those leading enterprises become
beneficiaries. Furthermore, the progresses and strength improvement occurring
in those enterprises means that China's TiO2 competitiveness will be further
enhanced in the international market.
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