Sinochem International
600500.SH
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Management of Company Operations

In the first half of 2022, there was a significant downward trend in the global economy due to the recurrence of the pandemic within China and global events. While the prices of chemical products remained high, the demand for downstream products was weak, making the business climate complex, harsh and highly challenging. With an intense focus on material science, Sinochem International has improved the operations of existing businesses such as ECH, epoxy resin and polymer additives, and also aggressively promoted incremental businesses with good market prospects such as nylon 66, aramid, ABS and lithium battery material.

1、New chemical material business

Basic raw materials and intermediates:
Leveraging the advantages of a comprehensive industrial chain and powerful engineering and R&D transformation capabilities, our competitive edge keeps getting sharper. In quarter one of 2022, the ECH project with an annual production capacity of 150,000 tons commenced production and stable operations, enabling the synergistic development of dual process routes and cementing the company’s position as top producers of ECH in China. Meanwhile, equipment installation and civil construction works were performed in an orderly fashion for the Phenol, Acetone, Bisphenol A, PDH and PO projects of C3 Phase 1. The overall construction of these said projects are set to expand the company’s portfolio for intermediate products and enhance the integrated offerings of the company.

High Performance Materials:
Currently, the products under this category primarily comprise epoxy resin, nylon 66, ABS and aramid. In quarter two of 2022, the project with an annual production capacity of 180,000 tons of epoxy resin in Liangyungang Industrial Park commenced trial production, thereby forming a total annual production capacity of 350,000 tons of epoxy resin. Meanwhile, the project with an annual production capacity of 40,000 tons of nylon 66 and 25,000 tons of Hexamethylenediamine intermediate commenced operations successfully in Zhongwei production base. As for the Phase One project at the Yangzhou Yizheng base with an annual production capacity of 24,000 tons of modified ABS material, trial production has commenced while transfer testing and certification processes have been completed for various key grades of Elix Polymers. The company’s production capacity for aramid is ranked first in the country at 5,000 tons per year with industry-leading product quality standards.

Polymer Additives:
This category primarily includes antioxidant 6PPD and intermediates including RT base, insoluble sulfur and high purity TMQ, of which the 6PPD antioxidant is leading in the global market. The Sennics Thailand plant with an annual production capacity of 25,000 tons of rubber antioxidant commenced production and operations in the second quarter of 2022. On the other hand, the main structure for the processing unit of the Lianyungang catalyst project has been completed while certain equipment installations have started. These developments set the stage for the company’s international production business and fortify its place in the catalyst industry.

2、Chemical new material business

As Asia’s largest chemical product distributor, the company upholds the developmental concept of “innovation, going green, sharing, and growth” to provide customers with innovative, excellent and green products, services and integrated solutions. The company primarily deals with products including engineering plastics, general plastics, basic chemicals, fine chemicals, biochemicals, forest-pulp-paper products and building materials. Furthermore, the company has a strong domestic automotive material marketing business encompassing modified ABS, modified PA and modified PC materials, and over 300 products of various grades. Having established an advanced system for customer-oriented customization services and supply chain management, the company provides end-to-end services to OEMs from the stages of design, mass production to product release.

3、Strategic emerging industries

In the field of new energy, the company has based its operations on the core business of material science. To this end, it has developed its lithium battery material industry which currently has a annual production capacity of 10,000 tons of ternary cathode material. With a stably operating production line, the company has seized market opportunities and employed multi-pronged measures to tackle market volatility and boost profitability. Furthermore, in order to synchronize the development of Sinochem Holdings’s lithium material industry chain, the company has performed moderate developments in its lithium battery business and consistently upgraded its operating capabilities. Meanwhile, it also continues to build and improve its capabilities in terms of relevant R&D, marketing and technical services in order to fortify the company’s foundation in the industry.

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