CHINA XD
Compounder starts up plant in Dubai after considerable delay / Volatile financial situation
Chinese technical compounds producer China XD Plastics (Harbin, Heilongjiang / China; www.chinaxd.net) has completed its production tests on a new plant in the Jebel Ali Free Zone of the Dubai Emirate. Commercial production is scheduled for the start of 2019 with a total capacity of 11,250 t/y – see Plasteurope.com of 05.09.2018. Dubai Xinda will market mainly polyamide-based compounds in Europe and the Middle East. According to XD CEO Jie Han, tests have been successful with customers in Italy and Spain.
 In Q3 2018 alone, the compounder more than doubled its spending on R&D compared to 2017 (Photo: China XD) |
The company, which produces compounds based on PA 6, PA 6.6, POM, PPO and PLA for automotive applications, was nevertheless unable to extract itself from the downward spiral in the third quarter of 2018. Sales were 4.6% down on the same quarter of 2017 at USD 297.2m (EUR 260m). Q3 2018 saw a loss of USD 19.5m (including currency differences). About half of the sales decrease is attributable to shrinking sales volumes due to the recent significant decline of automotive manufacturing in China.
According to the China Association of Automobile Manufacturers (CAAM, Beijing; www.caam.org.cn), the automotive industry still saw growth of about 1% in the first nine months of 2018 compared with the same period in 2017. From July to September, however, sales fell initially by 4%, then by 3.8% and finally by 11.6%. Han said China XD had declined to a similar extent.
Even against this background, the compounder is sticking to its previous sales forecast of USD 1-1.2 bn for 2018 as a whole, with net earnings of USD 70-80m. The projected sales figures could be achieved above all due to the increased prices for the purchased polyamide base polymers, which will, however, boost both sales and expenditures. The earnings forecast is doubtful in view of third quarter losses and accumulated earnings over nine months of USD 17m so far (USD 85m in the same period of 2017). At the same time, the Han family is negotiating with the China Construction Bank for a credit line of nearly USD 290m in order to pay off debts that have accumulated with various investments.
According to the China Association of Automobile Manufacturers (CAAM, Beijing; www.caam.org.cn), the automotive industry still saw growth of about 1% in the first nine months of 2018 compared with the same period in 2017. From July to September, however, sales fell initially by 4%, then by 3.8% and finally by 11.6%. Han said China XD had declined to a similar extent.
Even against this background, the compounder is sticking to its previous sales forecast of USD 1-1.2 bn for 2018 as a whole, with net earnings of USD 70-80m. The projected sales figures could be achieved above all due to the increased prices for the purchased polyamide base polymers, which will, however, boost both sales and expenditures. The earnings forecast is doubtful in view of third quarter losses and accumulated earnings over nine months of USD 17m so far (USD 85m in the same period of 2017). At the same time, the Han family is negotiating with the China Construction Bank for a credit line of nearly USD 290m in order to pay off debts that have accumulated with various investments.
07.01.2019 Plasteurope.com [241448-0]
Published on 07.01.2019
German version of this article...