Profits fell sharply, paint enterprise transformation pressure great

Recently, Bauhinia Paints Co., paint Group Ltd., 000 Chemical Holdings Limited, Guangdong Maydos building materials Limited by Share Ltd, Zhaoqing Qianjiang New Material Technology Co. Ltd. and a number of listed paint companies have released the 2017 semi annual report. The report shows that, due to rising raw material prices led to a number of corporate profits decline, some paint companies net profit directly cut.
It is understood that, by environmental supervision and periodic factors superimposed, into 2017, prices have become the main theme of the chemical industry. However, this round of price increases is grad. For example, the impact of upstream prices, paint enterprises are injured.
1 upstream prices too fast
Titanium dioxide, solvent, TDI and so on are the main raw materials of coatings, the cost of coating enterprises accounted for more than 80% of the total cost, therefore, raw material prices directly affect the profitability of coating enterprises.
Since last year, titanium dioxide prices all the way high, and this year’s price is rising straight, from the beginning of 14 thousand yuan per ton, all the way up to the current nearly 20 thousand yuan, or 42%. Entered in September, titanium dioxide prices continue to rise in a new round. In September 7th, Kimberly longmang announced that due to the recent price of titanium and other raw material prices, according to the market, the company decided since September 7th, sulfuric acid method of rutile type titanium dioxide sales price of domestic customers increase 500 yuan per ton, $50 for international customers per ton increase, other companies are starting to follow up.
“Due to the rapid rise in titanium dioxide prices, leading to continued increase in operating costs of enterprises.” Domestic well-known powder coating enterprises, Nanjing new materials Co., Ltd. Pu Pu Pu introduced.
At the same time, the first half of 2017, domestic and Asia butadiene plant maintenance is relatively concentrated, the domestic petrochemical products of butadiene supply affected, butadiene market price has now risen to nearly 10000 yuan per ton of acrylic acid; the highest rate of increase was about 110% tons; early TDI price in 28 thousand yuan, now stand on the 40 thousand yuan mark, the highest the rate of increase of 50%.
With the continuous rise of raw material prices, the operating costs of coatings enterprises are constantly increasing, which seriously compresses the profit margins of the coating enterprises.
2, corporate profits decline
In the paint group released 2017 report shows that during the reporting period, the group achieved operating income of HK $384 million, down 1.2%; gross margin decreased significantly, decreased by 37.9% over the same period last year by 9.9 percentage points to 28% during the review period. The head of the company said it was due to rising costs of raw materials and a fall in average selling prices for paint and paint products.
Maydos building materials Limited by Share Ltd reported that in the first half, the company achieved operating income of 381 million yuan, an increase of 11.49%; net profit of 10 million 430 thousand yuan, down 47.11%. In fact, the decline in profits of paint companies are far more than these two. The reporter statistics, Bauhinia paint, and the paint, Yip’s chemical 000 chemical, Qianjiang new paint and a number of listed companies were mentioned in the annual report in 2017 in the prices of raw materials and labor costs lead to falling profits.
In 2016, China’s coating output reached 18 million 997 thousand and 800 tons, has become the world’s largest producer of paint. However, the authority of the State Council Development Research Center data show that the number of domestic small and medium sized coatings enterprises occupy the entire industry number 90%, are scattered, low concentration, did not form a certain scale effect and other characteristics, the paint industry in a state of disorderly competition and waste of resources. It is because of these deficiencies, the current round of many chemicals prices, almost swallowed the profits of coating enterprises.
3, the transformation pressure is huge
In July this year, the environmental protection department examined and adopted the “13th Five-Year” VOC pollution prevention work plan “, paint industry has become the focus of remediation object VOCs.
The day before, Jiangsu Kunshan, Zhejiang Hangzhou, Guangdong Zhongshan has released a list of VOCs remediation project enterprises in 2017. According to statistics, this time, Jiangsu, Kunshan has 13 coating enterprises, Zhejiang, Hangzhou large Jiangdong industrial agglomeration zone, there are 3 paint companies, Guangdong, Zhongshan 10 paint companies have been included in the VOCs key remediation list. Moreover, the provinces, chemical parks into the park standards are more stringent, these are in the impact of coating enterprises increasingly weak living environment.
To this end, the industry said that the next step in the coating industry environmental standards will be more stringent, environmental pollution discharge permit system will be fully activated, VOCs sewage charges will also be fully implemented. This means that if the coating companies do not upgrade, or in accordance with the previous traditional production methods and emission management, it is likely to face pollution due to fines or shut down the risk. “Last year, we successfully developed a water-based ink, in the past six months time, we are actively facing customers to test, and achieved certain results.”