research in china · global and china titanium dioxide industry report, 2014 -2017 3 china titanium...

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Global and China Titanium Dioxide Industry Report, 2014-2017

Study Goal and Objectives

This report provides the industry executives with strategically significant competitor information,

analysis, insight and projection on the competitive pattern and key companies in the industry,

crucial to the development and implementation of effective business, marketing and R&D

programs.

Report Objectives

To establish a comprehensive, factual, annually updated and cost-effective information base on

market size, capabilities, output, competition patterns, downstream, goals and strategies of the

leading players in the market, reviews and forecasts.

To assist potential market entrants in evaluating prospective acquisition and joint venture

candidates.

To complement the organizations’ internal competitor information gathering efforts with

strategic analysis, data interpretation and insight.

To suggest for concerned investors in line with the current development of this industry as well

as the development tendency.

To help company to succeed in a competitive market, and understand the size and growth rate

of any opportunity.

This report presents the ideal medium to understand the increasing opportunities in the field of

this industry, including their market and applications, and will help research institutes,

manufacturers, distributors, investors and other industry insiders to succeed in this growing

industry.

Intended Audience

The report will be relevant to the following stakeholders:

Marketing managers to identify new market opportunities and develop targeted promotion

plans for their products；

Research and development professionals to stay on top of competitor initiatives and explore

demand for their products；

Business development executives to understand the dynamics of the market and identify

possible new markets；

Information and research center librarians to provide market researchers, brand and product

managers with the information needed to do their jobs more effectively.

Methodology

Both primary and secondary research methodologies were used in preparing this study.

Initially, a comprehensive and exhaustive search of the literature on this industry was conducted.

These sources included related books and journals, trade literature, marketing literature, other

product/promotional literature, annual reports, security analyst reports, and other publications.

Subsequently, telephone interviews or email correspondence was conducted with marketing

executives etc. Other sources included related magazines, academics, and consulting companies. 2


Information Sources

The primary information sources include NBS, WIND, etc.

National Bureau of Statistics of China (NBS)

Directly under the State Council, NBS is in charge of carrying out national statistics, accounting

national economy, working out statistical laws and regulations, statistical reform & modernization

programs and national statistics investigation plans, organizing, leading, supervising and checking

statistics and national economic accounting work in all regions and departments, and supervising

and checking the implementation of statistical laws and regulations.

Wind Information Co., Ltd (WIND)

Wind Information Co., Ltd (Wind Info), headquartered in Lujiazui Financial Center in Shanghai, is

a leading integrated service provider of financial data, information and software.

Chemical Industry Productivity Promotion Center of China

Founded in 1995, Chemical Industry Productivity Promotion Center of China is a not-for-profit

intermediary service institution whose establishment was officially authorized by the original State

Scientific and Technological Commission and relying on the original Science and Technology

Division of Chemical Ministry and the Central Research Institute of China Chemical Science and

Technology. The Center has 5 functional departments as well as 16 regional and professional

branch centers.

3


Abstract

Since 2013, global and China titanium dioxide industry has been characteristic of the following:

Global titanium dioxide capacity growth suffered stagnation while new capacity was mainly

concentrated in China: the titanium dioxide capacity worldwide in 2013 was 6.56 million tons,

against the figure 6.55 million tons in 2012, while the new titanium dioxide capacity, which

was mainly contributed by China, stood at 2.935 million tons in 2013, up 5.4% year on year,

and accounting for approximately 45% of the world’s total as opposed to 30% in 2010.

Thanks to economic recovery in Europe and America, the prosperity of titanium dioxide

industry in China saw a pickup in 2014, which can be elaborated below:

Great surge in export volume: during 2012-2013, the export volume of titanium dioxide

in China remained around 400 kt; while during Jan.-Aug. 2014, China exported 376 kt of

titanium dioxide, soaring by 48.62% yr-on-yr.

Substantial growth in net income of major companies: in 2013, there were merely less

than 20% titanium dioxide companies in the black, seeing meager profit; while from 2014,

with the rally in titanium dioxide price and the recovery of overseas demand, titanium

dioxide producers enjoyed distinct improvement in performance, in which Henan Billions

Chemicals reported a year-on-year growth rate of as high as 636.62%.

Rise in titanium dioxide price: since 2014, large titanium dioxide manufacturers at home

and abroad continuously have raised their quotations, and the titanium dioxide price in

the Chinese market tends upwards. In Sept. 2014, Chinese titanium dioxide was

averagely priced at RMB14,350/ton, slightly increasing by 5.21% in contrast with

RMB13,640/ton in Aug.2014 and jumping by 12.11% compared with the figure in Jan.

2014.

Net Income and YoY Growth Rate of Major TiO2 Producers in China, 2013 and H1 2014

(Unit: RMB mln)

4


Driven by the increasingly stricter environmental protection policies, the titanium dioxide

industry in China will develop toward large scale and chlorination process. Over 98% of the

titanium dioxide in China was produced via sulphate process. Access Conditions for Titanium

Dioxide Industry (Revised) and Policy on Titanium Dioxide-oriented Industrial Pollution

Prevention & Control Technology will be released in 2014 to promote industrial structure

upgrading and industrial agglomeration, which would be conducive to the industrial

development for a long time.

Global and China Titanium Dioxide Industry Report, 2014-2017 highlights the followings:

Capacity, product structure, regional capacity structure, producers’ capacity and competitive

landscape of global titanium dioxide industry;

Policy, capacity, output, consumption, import & export, price trend, industrial gross margin, etc.

of titanium dioxide industry in China;

Market structure, market pattern and profitability of major producers in China titanium dioxide

industry;

Upstream titanium dioxide raw material industry analysis from the perspective of titanium ore

and sulfuric acid market, and cost analysis of titanium dioxide;

Downstream application of titanium dioxide, involving demand structure and the demand from

sectors such as paint, plastic, papermaking and denitration catalyst;

Operation, output and sales volume of TiO2, revenue structure, gross margin, major investment

projects, etc. of 11 key Chinese titanium dioxide producer and 5 major titanium dioxide players in

the world;

Development prospect of China’s titanium dioxide industry, covering forecast for capacity,

output, import volume & export volume and total demand.

5


3 China Titanium Dioxide Industry

3.1 Capacity

3.1.2 Capacity Figures

In 2013, there were about ** titanium dioxide producers in China, with total capacity reaching **

kilotons, up **% yr-on-yr (the average operating rate of the whole industry increased to **% as

opposed to **% in 2012), of which ** companies boasted a capacity of over ** kilotons,

collectively adding up to ** kilotons, and the rest below** kilotons.

Titanium Dioxide Capacity in China, 1999-2013 (Unit: kiloton)

Unit: kt 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Capacity 550 720 ** ** ** ** ** ** ** ** **

YOY 14.6% 30.9% ** ** ** ** ** ** ** ** **

Source: TiO2 Branch Center of National Chemical Industry Productivity Promotion Center,

ResearchInChina

The surging domestic titanium dioxide capacity spurs the titanium dioxide industry to transform

from import substitution to export sales, which subjects the Chinese titanium dioxide industry to

dual influence from demand at home and abroad.

6


3.1.3 New Capacity

New Capacity of Titanium Dioxide in China, 2013-2015E

Producer New Capacity

(kiloton)

Planned

Commencement

Date

Status Process

Sichuan Lomon 100 2013 H1 Put into

production

Sulphate Process

Shandong Jinhai Titanium

Resources Technology

50 2013 H1 Put into

production

Sulphate Process

Guangxi Jinmao Titanium 50 2013 H1 Put into

production

Sulphate Process

Panzhihua Dongfang Titanium

Industry

80 2013 H1 Put into

production

Sulphate Process

Yunnan Xinli Nonferrous Metals 60 2014 H1 Trial run Chloride Process

Xuzhou Titanium Dioxide of

Nanjing Titanium Dioxide

Chemical

80 2014 H2 Under

construction

Sulphate Process

Luohe City Xingmao Titanium

Industry

60 2014 H2 Trial run Chloride Process

Ningbo Xinfu Titanium Dioxide 40 2014 H1 Trial run Sulphate Process

Anhui Venus Titanium Dioxide

(Group) Co., Ltd. of CNNC Hua

Yuan Titanium Dioxide Co., Ltd.

40 2014 H1 Trial run Sulphate Process

Guangxi CAVA Titanium

Industry

100 To be confirmed Under

construction

Sulphate Process

Chongqing Titanium Industry

Co., Ltd. of Pangang Group

100 2015 To be

implemented

Chloride Process

Jiangxi Tikon Titanium 50 2015 To be

implemented

Sulphate Process

Wuhan FangYuan Titanium

Dioxide

40 2015 To be

implemented

Sulphate Process

Source: ResearchInChina

7


3.2 Output

3.2.1 Output Figures

According to latest statistics of TiO2 Branch Center of National Chemical Industry Productivity

Promotion Center, in 2013, the total output of titanium dioxide in China hit ** kilotons (breaking

the **-kiloton mark for the first time), up **% from a year earlier, including ** kilotons of rutile

titanium dioxide, ** kilotons of anatase titanium dioxide and ** kilotons of non-pigment level and

special titanium dioxide, separately making up **% (down ** percentage points as opposed to the

figure in 2012, similarly hereinafter), **% (down ** percentage points) and **% (up **

percentage points) of the total titanium dioxide production.

Titanium Dioxide Output in China, 1999-2013 (Unit: kiloton)

Unit: kt 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Output 600 ** ** ** ** ** ** ** ** **

YOY 42.86% ** ** ** ** ** ** ** ** **


ResearchInChina

8


Output of Rutile Titanium Dioxide and % of Total Output in China, 2000-2013 (Unit:

kiloton)

Unit: kt 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Output 27 50 53 93 143 ** ** ** ** ** ** ** ** **

% of Total 9.3% 16.2% 14.3% 22.1% 23.8% ** ** ** ** ** ** ** ** **


ResearchInChina

3.2.2 Output Structure

In 2013, the Chinese titanium dioxide industry featured “two decreases and one increase”: despite

the total output growth in the industry, the proportions of rutile titanium dioxide and anatase

titanium dioxide to the total titanium dioxide output decreased while that of non-pigment and

special titanium dioxide especially denitration titanium dioxide showed an uptrend.

Output Structure of Titanium Dioxide in China, 2013

Note: Figures in brackets are the proportions in 2012.


ResearchInChina

9


7 Key Titanium Dioxide Enterprises in China

7.2 Henan Billions Chemicals Co., Ltd.

7.2.1 Profile

Company

Name

Henan Billions Chemicals Co., Ltd.

Website http://www.billionschem.com/ Established 1975

Registered

Capital

RMB94 million Employees 1,707

Address Zhongzhan District, Jiaozuo,

Henan

Main

Product

Titanium dioxide, zirconium

products and aluminum sulfate

Stock Code 002601 Brand Xuelian® Titanium Dioxide

7.2.2 Output and Sales Volume of TiO2

In H1 2014, the company produced ** tons and sold ** tons of titanium dioxide, respectively

rising ** and ** yr-on-yr.

Titanium Dioxide Output, Sales Volume and Inventory of Henan Billions Chemicals,

2010-2014 (Unit: ton)

2010 2011 2012 2013 2014H1

Output 102,100 ** ** ** **

Sales Volume 100,700 ** ** ** **

Inventory - ** ** ** **

Source: Henan Billions Chemicals, ResearchInChina

7.2.3 Operation

Subject to the overall economic environment at home and abroad, the titanium dioxide market

remained sluggish. 2013 witnessed the company merely post RMB1,722.5 million in revenue and

RMB23.6 million in net income, respectively falling by 4.51% and 87.22% from a year earlier.

In 2014, benefiting from the economic recovery in Europe and the powerful economic rebound in

Q2 in the United States, Henan Billions Chemical earned a revenue of RMB1,048.4 million and a

net income of RMB11.6 million in H1, increasing substantially by 32.71% and 636.62% on a

year-on-year basis, separately.

10


Revenue and Net Income of Henan Billions Chemicals, 2009-2014 (Unit: RMB mln)

2009 2010 2011 2012 2013 2014H1

Revenue 778.9 1,247 1,906.1 1,803.8 1,722.5 1,048.4

Net Income 51.7 161.7 359.5 184.5 23.6 11.6


7.2.4 Revenue Structure

The revenue from rutile titanium dioxide had an increasing share in the revenue structure of

Henan Billions Chemicals during 2008-2011, of which, the 600 series swept ** of total revenue

while the 500 series took up ** in 2009.

Revenue Structure of Henan Billions Chemicals (by Product), 2008-2011

2008 2009 2010 2011

600 Series Rutile 47.47% ** ** **

500 Series Rutile 23.07% ** ** **


In H1 2014, the revenue contributed by titanium dioxide products accounted for **% of total

revenue.

Revenue Structure of Henan Billions Chemicals (by Product), 2012-2014

2012 2013 2014H1

Titanium Dioxide 95.05% ** **

Zirconium Products 3.29% ** **

Others 1.67% ** **


11


In 2012, impacted by the financial crisis, the titanium dioxide market underwent downturn, and

Henan Billions Chemicals’ proportion of export revenue slipped to **%. However, with the

recovery of overseas economy, the export revenue got improved and occupied **% of total

revenue in H1 2014. Domestic sales of the company are mainly concentrated in East China and

North China.

Revenue Structure of Henan Billions Chemicals (by Region), 2008-2014

2008 2009 2010 2011 2012 2013 2014H1

China 66.11% 68.95% ** ** ** ** **

Overseas 33.89% 31.05% ** ** ** ** **


7.2.5 Gross Margin

The gross margin of titanium dioxide has been on the decline since 2011, but as the industry

demand picks up, the figure has come to **% in 2014, up ** percentage points.

Gross Margin of Henan Billions Chemicals, 2012-2014

2012 2013 2014H1

Titanium Dioxide 23.18% ** **

Zirconium Chemical 2.59% ** **

Others -8.16% ** **


12


7.2.6 R & D and Investment

In H1 2014, the company spent ** as R&D costs which made up **% of the operating revenue.

R&D Costs and % of Total Revenue of Henan Billions Chemicals, 2009-2014

2009 2010 2011 2012 2013 2014H1

R&D Costs (RMB10,000) 2313.94 3639.82 ** ** ** **

% of Total Operating Revenue 3.10% 3.04% ** ** ** **


Key Projects under Construction of Henan Billions Chemicals

Project Total Investment

(RMB mln)

Commissioning Time / Process

(as of end-June 2014)

60 kt/a Chloride Process Titanium

Dioxide Production Line Project

572 Dec. 2014

Rutile Titanium Dioxide Production

Line Expansion Project

540 81.56%

Titanium-rich material project 510 41.65%


7.2.8 Performance Forecast

According to the plan, by the end of the 12th Five-Year Plan period, the company will be able to

produce 300 kilotons of rutile titanium dioxide (consisting of 100 kilotons by chloride process and

200 kilotons by sulphate process), 30 kilotons of zirconium products (including 1 kiloton of

non-raw material high-tech high value-added products), 50 kilotons of color iron pigments, 50

kilotons of ferrous sulphate monohydrates and 300 kilotons of high titanium slag.

Revenue and Net Income of Henan Billions Chemicals, 2014E-2017E (Unit: RMB mln)

2014E 2015E 2016E 2017E

Revenue 2,097 ** ** **

Net Income 26 ** ** **

Source: ResearchInChina

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