Private enterprises are changing the pattern of China’s petrochemical industry. What was just paper a few years ago is now a reality.
Be the first to break through the 10 million tons mark among global peers.
Nationally since May 18, 2001 In the past 20 years since it was the first private enterprise to build the first polyester melt direct spinning production line, Hengyi Group has adhered to the backward integration strategy and formed an industrial pattern of “one drop of oil, two threads”, becoming a leader in integrated management of the entire industry chain. A multi-national enterprise group worth hundreds of billions, especially since 2017, Hengyi Group has seized the opportunity of supply-side structural reform, actively used capital power, and achieved through multiple acquisitions and mergers at the fastest speed and lowest cost. A large-scale expansion of polyester production capacity of millions of tons. Mainly including: first, Jiaxing Yipeng, Taicang Yifeng, and Shuangtu New Materials have added a total of 1.55 million tons of polyester and downstream filament production capacity; second, Hangzhou Yijin’s merger and acquisition was completed at the end of April, adding 850,000 tons of filament; in addition , projects under construction include Jiaxing Yipeng’s 500,000 tons of FDY under construction, which is expected to be fully released in 2020, and the “1 million tons of differentiated environmentally friendly functional fiber construction project with an annual output of 1 million tons per year” project that was put into production on February 23. Two projects After completion, a total of 1.5 million tons of polyester production capacity will be added.
“10 million tons”, for Hengyi For the group, it marks that Hengyi Group’s “columnar” industrial structure is more optimized, the polyester, nylon and “double fiber” industrial layout is more complete, and the market voice is more powerful. “Now each of our chemical fiber factories is equivalent to the gas stations of upstream PTA and PX. It may not be a very profitable product, but it is a channel to ensure upstream competitiveness and a cash flow platform.” Hengyi Qiu Jianlin, chairman of the group, said this in a joint interview with Shanghai Securities News and Securities Times.
Breaking through the 10 million tons mark, the “Hengyi speed” is astonishingly fast!
In just 20 years, Hengyi has taken the lead among global peers to break through the 10 million tons mark. It must be said that the “Hengyi speed” is astonishingly fast!
In recent years, a new round of production capacity competition has begun in the polyester industry. On the competitive track, it belongs to the “leading race”. Large leading companies are leading industrial investment and launching new projects, which is a distinctive competitive feature of the polyester market.
Nowadays, we rarely see companies investing in new devices that we have never heard of in the market before. In the round of investment around 2015, new projects in the polyester market were basically in full bloom. Under the market conditions in recent years, the focus of our investment is to see which company can expand its production capacity first and who is the leader. At the same time, we need to judge whether the company’s newly put into production capacity truly has a cost advantage, and the cost is determined by comprehensive factors such as technical level, advancement of new equipment, production capacity scale, energy consumption, and integration level.
It is worth noting that in the process of rapid expansion of large leading companies, different companies have highlighted certain differentiated ideas. Among them, Hengyi Group is a typical representative of rapidly expanding the scale of polyester through mergers and acquisitions and restructuring in the capital market.
In this regard, the Financing Director of Zhejiang Hengyi Group Co., Ltd. Gao Lili said: “In the past few years, we have rebuilt Hengyi. By operating in the capital market, we have rapidly expanded our polyester production capacity. Hengyi has always been a leader in the PTA field, with an annual output of 13.5 million tons. production capacity, but previously, Hengyi’s annual polyester production capacity was only more than 1 million tons, which is an ‘inverted triangle’. Since China’s promotion of ‘supply-side structural reform’, Hengyi Group has seized the opportunity to invest in the polyester industry In order to acquire and merge suitable projects, Hengyi also joined forces with several companies to establish a ‘merger and acquisition fund’ in 2017. Since 2017, Hengyi Through acquisitions and mergers, we have rapidly increased our polyester production capacity by more than 4 million tons. In this way, Hengyi has achieved expansion at the fastest speed and at the lowest cost. Moreover, some of the polyester factories we acquired still have a lot of land. It has laid the foundation for our continued expansion in the future.”
Want to compete for resources with the six giants? Enterprises in the rear cannot keep up!
After more than 30 years of rapid development, the domestic polyester and polyester industry has matured in technology and technology. In recent years, it has entered into the realization of scale effect and the upstream and downstream industrial chain. supporting development stages.
In the past five years, China’s polyester and polyester industry has accelerated its structural adjustment, transformation and upgrading.�Industry concentration has increased, and the benefits of leading companies have emerged. Hengyi Petrochemical has increased its volume of polyester in recent years. In the future, the capacity of polyester raw materials such as PX, PTA, and MEG will be greatly expanded, and the cost of polyester will remain loose. The increase in filament concentration will also help to maintain relatively stable prices. It is expected that the price difference of filament is expected to be expansion, and Hengyi Petrochemical will benefit.
As of 2019, there are 34 companies with polyester polymerization capacity of 400,000 tons/year and above. As of the end of 2019, the six major listed companies (Hengli, The total production capacity of PTA and polyester filament of Tongkun, Hengyi, Rongsheng, Shenghong, and Xinfengming has accounted for 55% and 53% of the country’s total production capacity respectively.
Leading companies have more advantages in production capacity expansion due to their capital, technology and other advantages. Their market share will increase again in the future, and the leading industry’s voice will continue to strengthen.
From the perspective of the source of production capacity, new production capacity is also mainly concentrated in leading companies, and industry concentration has further increased. According to data from CCFEI and Dongxing Securities, in the second half of 2020, there are 7 new units planned to be put into operation in the domestic direct-spinning polyester filament industry, all of which are capacity expansions of mainstream major manufacturers. The total production capacity is about 2.4 million tons/year, of which Hengyi is 1 million tons. /year, Xinfengming 300,000 tons/year, Tongkun 500,000 tons/year, Hengli 600,000 tons/year, Shenghong 250,000 tons/year. After completion and commissioning, it is expected that the CR6 of the industry will continue to increase to about 59%. The filament production capacity scale advantages of Tongkun Co., Ltd., Hengyi Petrochemical, and Xinfengming have become increasingly obvious, while Hengli Petrochemical, Rongsheng Petrochemical, and Shenghong Group have passed the upstream Carry out differentiated competition in refining and chemical supporting equipment.
At present, Hengyi Group has firmly established itself as the “boss” in polymerization production capacity, and the gap with the top ten companies is getting wider and wider. In the later period, polyester projects will continue to be put into production. The companies in the back may not be able to catch up even if they try hard to catch up…
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