At present, the domestic polyester industry chain is in the expansion and integration stage, especially the larger polyester companies in the industry, such as Tongkun, Rongsheng, Hengli, Hengyi, Shenghong and Xinfengming, etc., are still adding new ones. Or acquire polyester production capacity and extend its industrial chain to the upstream raw material industry. In recent years, benefiting from the increasing concentration of the industry, Tongkun has taken the initiative in this round of expansion of the polyester industry. With its leading technology level, overall scale advantage and comprehensive strength, it has actively invested in and constructed multiple new projects. , accelerating the expansion of polyester production capacity.
In April this year, the first weaving workshop of Tongkun Group’s Hengyang project was officially put into production. This also marked a new breakthrough in the development model of Tongkun’s entire industry chain, successfully realizing the transformation from “a drop of oil” to “a piece of cloth”! The Hengyang project is an important development strategy for Tongkun to extend its layout to the middle and lower reaches of the industrial chain and achieve “one piece of cloth”. And recently, it has made another big move!
Tongkun makes another big move: investing in the construction of 1.2 million tons of differentiated fiber
and 2×600,000 tons/year natural gas to ethylene glycol project
Recently, Tongkun issued an announcement stating that in combination with the market demand for textile products and its own development needs for chain extension, chain repair, and chain strengthening, the company decided to launch Anhui Youshun with an annual output of 1.2 million tons of lightweight comfort and functional differences. Chemical fiber project and Zhongkun New Materials 2×600,000 tons/year natural gas to ethylene glycol project, including:
The Anhui Youshun annual output of 1.2 million tons of lightweight, comfortable and functional differentiated fiber project has a construction period of 3 years and a total investment of 5.765 billion yuan, of which the construction investment is 5.159 billion yuan (including foreign exchange of 462 million U.S. dollars) and the interest during the construction period is 2.30 billion yuan. 100 million yuan, and the initial working capital is 374 million yuan. The sales price of the project is determined based on the market and the actual sales situation of the company. The annual operating income after reaching production is estimated to be 11.390 billion yuan.
The project is located in Longqiao Chemical Industry Park, Lujiang High-tech Industrial Development Zone, Hefei, Anhui Province, using Anhui Youshun’s existing land in the park to build a new polyester workshop, spinning and packaging workshop and other building (structure) projects of 415,894 square meters, equipped with polyester 4 sets of production equipment, including 48 high-speed winding machine production lines, 48 automatic doffing lines, 12 automatic packaging lines and supporting domestic production equipment and public engineering equipment, using internationally leading polymerization technology, polyester melt direct spinning technology, intelligent manufacturing technology and green manufacturing technology, forming an annual production capacity of 1.2 million tons of lightweight, comfortable and functional differentiated fibers and 3,168 tons of acetaldehyde recycling.
In addition, Zhongkun New Materials has invested in a 2×600,000 tons/year natural gas-to-ethylene glycol project in the Korla Petroleum and Petrochemical Industrial Park in Bazhou, Xinjiang. The total investment submitted for approval is 9.941 billion yuan (5.154 billion yuan for the first phase), of which the construction investment is 9.525 billion yuan ( The first phase is 4.939 billion yuan), the interest during the construction period is 336 million yuan (the first phase is 174 million yuan), and the initial working capital is 78.9388 million yuan (the first phase is 40.502 million yuan).
The project plans to acquire 1,397 acres of new land and build 229,332 square meters of new natural gas conversion workshop, gas workshop, ethylene glycol workshop and other buildings (structures). After the project is fully completed, it can achieve an output value of approximately 5 billion yuan, with an annual average of national and local It contributes about 510 million yuan in tax revenue and can drive an industrial output value of about 10 billion yuan in local related industries.
Leaders have the ability to expand production, while small companies can only continue to transfer market share.
The core of future industry competition is cost competition
Entering 2022, the economic situation at home and abroad is still complex and severe. Affected by the epidemic, the overall demand in the chemical fiber industry has weakened, the contradiction between supply and demand has become prominent, market prices have dropped, and industry profitability has declined. But no matter what the chemical fiber market is like, in order to gain greater advantages, polyester “big guys” will not miss opportunities in the future, and the industry’s big moves represented by leading companies are still continuing.
The downstream terminal of polyester is textiles and clothing. Although the short-term demand has declined due to the epidemic, in the long term as residents’ income increases, global consumption will continue to grow. Judging from historical data, my country’s polyester filament output has grown at a compound rate of approximately 10% over the past decade, and production capacity has exceeded 40 million tons in 2019. The core of competition in this industry is cost competition. At present, only leading companies have the ability to expand production, and small companies can only continue to transfer market share. Objectively, this round of epidemic will also accelerate the trend of industry concentration towards leading companies.
High concentration in an industry or as small as a company does not mean weak market competition. High concentration may coexist with fierce competition, especially in the current international economic situation. As far as polyester is concerned, the industry is highly concentrated, and larger companies play a leading role in the market, jointly promoting market development and maintaining industry profit levels, which to a certain extent is also beneficial to the healthy and stable development of the industry.
Tongkun Co., Ltd. pointed out in previous announcements that in recent years, my country’s chemical fiber industry has increased innovation, focused on the overall technological progress of the industry, and eliminated backward production capacity through market means. The differentiation rate of chemical fibers has further improved, but it is still clustered with developed countries. There is a certain gap in the differentiation rate of ester fiber. Therefore, improving the differentiation rate of chemical fiber products has become a top priority for the current development of the chemical fiber industry. The new project will mainly produce differentiated and functional polyester filaments, which will help further enhance the polyester production capacity of Tongkun Co., Ltd.��Differentiation rate of filament products and optimize product structure.
In the future, the competition in the polyester market will further intensify, the granularity of enterprise operations will be refined, and cost control will become more stringent. Polyester production enterprises will lengthen and broaden the industrial chain through horizontal or vertical integration, with large scale, strong strength, and supporting industrial chain. Well-established companies will have more say. Therefore, in the future polyester industry, brand effect and large-scale development will be important bargaining chips for companies to compete for the market.
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