Soda ash industry continues to weaken with excess capacity
Date:2013-04-01   View:3064

March 18 - business club

On March 14, shandong HaiHua co., LTD. (hereinafter referred to as 'shandong HaiHua') on the day of the soda ash online offer is 1350 yuan/ton. But the actual price of sales tax is only about 1250 yuan per ton. Shandong HaiHua board secretary Wu Bingshun told the economic observer said that at present the company costs about 1300 yuan, clinch a deal is now 1300 yuan of the following is not make money.

Soda ash the main downstream of the glass, printing and dyeing, phosphate, small chemical industry, etc. Downstream of the downturn in demand. National real estate regulation and control policy, the real estate industry rapidly cooling, sharply reduce the new projects, which directly lead to the collapse in demand for glass, real estate industry domestic printing and dyeing industry downturn in prices at the same time, make the soda ash industry downstream demand. After the 2008 financial crisis, the production capacity of 1.2 million ~ 1.3 million tons of soda enterprises are built in succession, led to the current total output of industry may break through 30 million tons, with the actual demand of more than 2000, ten thousand tons of serious contradiction.

Business club, according to data on March 12, soda ash reference price is 1263.33 yuan per ton, since March 3, 2013, nearly 10 days continuously decreased by 4.172%. 2012 domestic market trend falls throughout the year, soda ash light soda ash fell by 23.78%. Domestic heavy soda ash also showed a trend of decline throughout the year, or 27.73%.

14 afternoon, shandong HaiHua team will be opened one afternoon, for how to get rid of losses this year, hope to be able to discuss a solution, but 'what figure like? Pressure really very big.' Wu Bingshun said.

losses

In 2012, shandong HaiHua losses up to 520 million, this is the second time after 2009, the huge losses, also is one of the most serious.

Wu Bingshun said that shandong HaiHua company benefits can also be in 2011. Three quarters are profitable because 2011 years ago, only in the fourth quarter earn less. But since the fourth quarter of 2011, gradually turned to the downturn, the price is the persistent downward by 2012. Situation is like that. 'the whole soda ash industry and its production process is set up, now change the production process is not realistic. Innovation, technological upgrading, and also not solve the big problem. Changes cannot be easily of the implementation of the management method, and can't cut, really hard.' Wu Bingshun even hope that journalists can help provide some policy, industry information and solutions.

HaiHua is soda ash for the leading product enterprise in shandong, shandong HaiHua ChunJianChang sales staff said Ms. Lee, the former period prices would fall, although sales didn't how to less, but it has been doing the business at a loss.

Wu Bingshun said, the more you sell more luckily, the company for the production capacity and the moderate control, normal production capacity 2.5 million tons. Production control within 2.3 million tons last year, but the overall sales is not reduce much.

Soda ash production process is divided into ammonia alkaline and alkaline and natural alkaline or production method. Proportion of natural soda co., LTD., the influence on the market is limited. But united alkaline enterprise production cost compared with ammonia alkaline low 200 yuan/tons, mainly from soda ash production by-product ammonium chloride products to earn some money, combined with the ammonium chloride market is good recently, alkaline production enterprise, the downturn in the market, also make some profit. And based on ammonia as the main process of shandong HaiHua, feel life even more difficult. Wu Bingshun said, such a low how long it is hard to estimate, all losses on this price.

In 2012, shandong HaiHua's 10 major subsidiary seven losses, 1 profit is zero, only two for a small profit. Companies have adopted some self-help measures, such as workers and selling noncore assets.

Shandong HaiHua at the end of 2012 the company registered 2012 workers, has decreased by 652 people in 2011, a drop of nearly 8%. In January 2012 successfully transfer the loss in 2010, a subsidiary of shandong biggest HaiHua shengxing chemical co., LTD., to increase net income 18.1016 million yuan. In addition, there will be 2 subsidiary weifang frequently animal husbandry co., LTD., the equity transfer, and cancellation of the kites are in Shanghai chemical industry trade co., LTD.

Wu Bingshun said that the company no layoffs, the main reason for reducing the number of employees has two, one is the main subsidiary company equity transfer, personnel naturally decreases; HaiHua group legal compliance for part of the noncore business of equity transfer, involved personnel on the basis of respecting the will of the people, to take internal placement, voluntary terminates the contract settled. This part is about 400 ~ 500. Two is company staff normal retirement, resignation, etc. 'Company to do this, also based on the principle of prominent main business, with asset sales, personnel also decreases, accordingly achieve thin and natural attrition.' Wu Bingshun said.

Industry lost

More than shandong HaiHua a hard days, the soda ash industry has maintained a struggle. A-share listed company has released 2012 annual report of several soda enterprises, are in profit decline in the channel, including Qingdao JianYe losses amounted to 255 million yuan, poetic chemical A 81% drop in net profit, net profit fell by 20%, and state shares double loop are ammonium chloride products of science and technology support, but the profit is expected to also only 0 ~ 10 million yuan. But the company in 2011 net profit of 354 million yuan.

Front of soda ash industry is overcapacity situation, price is low, but the domestic new soda project is still in production. Overall capacity has been industry statistics, soda ash industry in 2800 ~ 30 million tons. And the actual market demand is only more than 2000, ten thousand tons of overcapacity situation is very serious.

Industry for the overcapacity situation has quite a few complaints, a senior executive of shandong HaiHua confessed that when ChunJianChang on 600000 tons in 2004, the national development and reform commission are not batch, to research office under the state council for approval, so to carry on the overall balance, to control capacity has played a critical role. But after the financial crisis in 2008, production capacity of 1.2 million ~ 1.3 million tons of soda enterprises are built in succession, led to the current total output of industry may break through 30 million tons. This kind of demand and excess capacity contradictions increasingly prominent, just too much impact on the industry.

Business club, according to analysts KanBaoXia affected by excess capacity, homogeneous product markets crowded stacks, caused low price competition in the market. Soda ash the main downstream of the glass, printing and dyeing, phosphate, small chemical industry, etc. Downstream of the downturn in demand. National real estate regulation and control policy, the real estate industry rapidly cooling, sharply reduce the new projects, which directly lead to the collapse in demand for glass, real estate industry domestic printing and dyeing industry downturn in prices at the same time, make the soda ash industry downstream demand. Soda ash industry maintained at about seventy percent capacity utilization at present, most enterprises low load production.

Soda ash industry prospects for future, pessimistic about the personage inside course of study thinks, industry overcapacity, digest the existing inventory needs at least two years, some enterprises way out can be to halt production, or face may be eliminated by the market. Qingdao JianYe don't promise to the industry, their business plan for next year is 'total loss less than 160 million yuan.

But still shandong HaiHua think have opportunity - as countries continue to implement for the construction of affordable housing and the expansion of the scale and urbanization, will drive the soda ash downstream industries, especially the rapid development of glass industry, also brought opportunities for soda ash industry. Soda ash demand of market increases year by year, to ease China's soda market excess capacity.