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Sinochem Plastics Eyes Industry as Next Transition

2018-09-03

China's major chemical distributor Sinochem Plastics, a subsidiary of Sinochem International, is planning to participate in new material division and production to arm itself with industry advantage in the fast-evolving market, a company executive said.

"Investment and acquisition will be our focus in transition to a producer," Zhang Xiaolei, General Manager of the company said.

Following its founding back in 1988, Sinochem Plastics has evolved from an importer to a trader and finally a distributer, without much touch in manufacturing.

The company early this year completed acquisition of Spanish acrylonitrile butadiene styrene (ABS) producer Elix Polymers, through its parent company Sinochem International, a large-scale listed corporation of global presence (stock code: 600500.SH) with core competitiveness in agrochemicals, intermediates, new materials and polymer additives. 

Elix has a nameplate capacity of 170,000 tonne/year of ABS while productions stand at 120,000 tonnes annually at present, occupying around 40% of the ABS Specialty market share in Europe, according to Zhang.

"First, we will import into China Elix's ABS products, which are all special grades that feature high-end applications. Next, we will apply Elix's technology into a new production plant in China," Zhang said.

The company is currently selecting site for the plant, which will produce ABS modified plastics.

Zhang said that car, 5G and medical are the three major targeting applications for its outputs.

"We see big potentials in 5G and medical applications for modified ABS in China in the future, and demand from medical would be particularly strong ", he said.

The company predicts 5% of compound annual growth rate (CAGR) on ABS demand between 2019-2024.

The transition to a manufacturer from a distributor marks another milestone in the company’s innovation, a key guarantee to its continuous success in the past 30+ years, Zhang said.

However, “We’re not moving to produce everything, but only those advanced materials with high technology barriers and huge market potentials,” he added.

Aside from ABS, Sinochem Plastics is also interested in developing other materials like degradable plastics and graphene products.

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