On the evening of July 9, Hengyi Petrochemical Co., Ltd. issued an announcement stating that the company or its holding subsidiaries planned to pay cash for Guangxi Hengyi New Materials Co., Ltd. held by Ningbo Jingren 100 % equity. Since the Guangxi Hengyi New Materials project is still in the early preparation stage, the acquisition price is based on the net assets of Guangxi Hengyi New Materials’ financial statements on June 30, 2020. It is determined through negotiation between the parties to the transaction. The final price of the above transaction The transfer price is based on 508 million yuan.
According to the announcement, Guangxi Hengyi New Materials Co., Ltd. was established on July 16, 2019 with a registered capital of 500 million yuan. The company is located at 8 Haijing 2nd Street, Qinzhou Port Economic and Technological Development Zone, Qinzhou City No. 4, China Merchants Building, its main business includes the manufacturing of man-made fibers (cellulose fibers), the production and sales of chemical products (except hazardous chemicals), the sales of instruments, machinery and equipment, and the import and export of technology.
Hengyi Petrochemical stated that this acquisition aims to improve the company’s industrial layout in the field of caprolactam and related supporting production, expand The company’s business scope and overall competitiveness in the caprolactam field have improved, and the company’s “one drop of oil, two threads” entire industry chain layout has been gradually improved.
On July 2, Hengyi Group and Qinzhou City discussed the Hengyi Qinzhou high-end green chemical fiber integration project We conducted face-to-face discussions and exchanges on relevant matters such as construction and trade logistics business cooperation, and were committed to promoting all-round and in-depth strategic cooperation between the two parties and strengthening Hengyi’s control of the downstream.
A year ago, the two parties signed an agreement. Hengyi will build a “Belt and Road” cross-regional cooperation and a high-end green chemical fiber integration project for ASEAN in Qinzhou, building caprolactam-nylon, PTA- Polyester and other sub-projects have a total investment of approximately 45 billion yuan. Benzene, the main raw material of the project, will be directly transported to Qinzhou by Hengyi Brunei Refinery.
At the end of 2019, the first phase of the Hengyi Brunei refining and chemical integration project was put into operation, and the advantages of integrated operations gradually emerged. After achieving major breakthroughs in the first phase of the project, Hengyi Petrochemical plans to invest in the construction of the second phase of Hengyi Brunei’s 14 million tons refining and chemical project, with an annual production capacity of 1.5 million tons of ethylene and 2 million tons of PX chemicals.
Currently, Hengyi Petrochemical has formed a full industrial chain layout of “one drop of oil, two threads”, with a crude oil processing capacity of 8 million tons/year (70% equity), and a controlling stake in PTA production capacity of 13.5 million tons. / year, polyester fiber 6.35 million tons / year, polyester bottle flakes 1.5 million tons / year, caprolactam 400,000 tons / year. In the future, Hengyi Petrochemical will focus on the balanced development of upstream and downstream, adding 14 million tons/year of crude oil processing capacity, 6 million tons/year of PTA production capacity under construction, 1.35 million tons/year of polyester fiber, and 500,000 tons/year of polyester bottle flakes. Year.
Multiple times Acquisitions have rapidly expanded the scale of polyester
In recent years, Hengyi Petrochemical has increased its mergers and acquisitions in downstream industries, spending billions of yuan to acquire Jiaxing Yipeng, Taicang Yifeng and Shuangtu New Materials, etc. Currently, Hengyi Petrochemical is optimizing its functional fiber production expansion plan and acquiring the chemical fiber assets of its major shareholder, using the “capital + mergers and acquisitions + integration” strategy to strengthen its midstream and downstream operations, achieving a state where scale and efficiency go hand in hand.
It is understood that since 2017, Hengyi Petrochemical has integrated a total of 8 companies in the polyester industry through multiple mergers and acquisitions. Enterprises, including Hongjian, Longteng, Minghui and other polyester companies, restarted various projects in a short period of time, quickly achieved a large-scale expansion of millions of tons of polyester production capacity, and added new polyester Production capacity is 4 million tons. The Haining Hengyi project is an important manifestation of Hengyi Petrochemical’s focus on the polyester fiber segment and its continued rapid expansion through the construction of new projects.
For Hengyi Petrochemical, Zhao Chen, chief petrochemical analyst of Orient Securities, said that at the end of 2019, Hengyi Brunei refining and chemical integration The project was successfully put into production. Although the scale of production capacity is small, the location advantage has brought unique profit points that cannot be replicated in sales, supporting facilities, taxation, etc. It has also avoided fierce domestic competition, and the long-term return rate should not be low. Its PTA business belongs to the first echelon in the industry, and it plans to invest in the construction of 6 million tons of new production capacity in the future to consolidate its existing position. In terms of polyester, its production capacity is mainly based on mergers and acquisitions, and its layout is relatively scattered. Objectively speaking, it does not have a strong cost advantage. The Haining new materials project under construction will be its first single large base with a million-ton level. , the competitiveness of Hengyi Petrochemical is expected to improve in the future. Since refining and PTA account for a high proportion of Hengyi Petrochemical’s assets and revenue structure, Hengyi Petrochemical will also maintain a synchronized expansion development trend of upstream and downstream in the future.
At present, Hengyi Petrochemical has developed into a leader in the integration of the “PTA-polyester” and “CPL-nylon” industrial chains Enterprises, and through differentiated development models such as building upstream refineries overseas, expanding midstream and downstream links domestically, and mergers and acquisitions, to create a “column” of “crude oil-PX-PTA-polyester” and “crude oil-benzene-CPL-nylon” Balanced and integrated industrial chain.
The future of Hengyi Petrochemical is promising!
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