China Petrochemical Development Corp (CPDC, 中石化) yesterday said it is to start producing ortho-phenylphenol (OPP) next year as part of its efforts to tap into the specialty chemicals market.
OPP is an antimicrobial agent that can be used in a massive number of products, including fire retardant, fungicide and optical instruments, company data showed.
CPDC said it would build several OPP production lines at its plant in Miaoli County, which would have an annual capacity of 2,000 tonnes in the first half of next year.
To expand its presence in the local specialty chemicals market, CPDC is also to construct a plant for producing engineering plastics in Kaohsiung, CPDC interim president Janson Yu (余建松) told a news conference in Taipei.
The new facility is scheduled to begin mass production in the fourth quarter of next year, the company said, adding that it hopes to secure orders of lightweight engineering plastics from electric car makers over the coming years.
Those products — which have higher technological thresholds and better margins — can be used to replace traditional metal components inside car bodies, a CPDC official told the Taipei Times.
The two expansion projects in the specialty chemicals sector are in line with the firm’s long-term strategy to pursue vertical integration and reduce reliance on its core business, making caprolactam (CPL) and acrylonitrile.
Yu gave a conservative outlook for recent CPL prices, saying that the oversupply problems in the Chinese market are not yet resolved.
“We still feel that pressure on the profitability of CPL products might climb this year, despite Beijing’s measures to curb oversupply [there],” he said.
CPDC is relatively optimistic about its acrylonitrile business, due primarily to growing demand from India and the Middle East.
China’s tighter environmental regulations might also help stimulate global prices of acrylonitrile products in the near term, the chemicals maker said.
CPDC posted a net profit of NT$4.32 billion (US$142.56 million) for the first half of the year, compared with a net loss of NT$1.42 billion in the same period last year, which the firm mainly attributed to profits generated by the disposal of its subsidiary, Taiwan Chlorine Industries Ltd (志氯).
That translated into earnings per share of NT$1.85, compared with losses per share of NT$0.61, a company filing said.
Sales in the first eight months of the year jumped 32.09 percent to NT$22.02 billion from NT$16.67 billion on a yearly basis.
CPDC shares yesterday gained 1.09 percent to close at NT$13.9 in Taipei trading, beating the broader market, which rose 0.68 percent.
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