① Wan Kai New Materials will invest in an SSP device with an annual production capacity of 300,000 tons in Nigeria ② The relevant person in charge of the company said that the consumption of African bottle-grade PET is greater than the supply, and that Nigeria, as the most populous country in Africa, has sufficient market capacity ③ Domestic bottle-grade PET production capacity has increased dramatically, so the company is speeding up overseas expansion
Financial News Agency, December 6 (Reporter Chen Kang) In order to ease the pressure of concentrated investment in domestic bottle-grade PET (polyester bottle) production capacity in recent years, Wan Kai New Materials (301216.SZ) has turned its attention to the African market. On the evening of December 6, the company announced that it would establish a joint venture with XJP Trading Company through a subsidiary in Singapore and invest in the construction of a bottle-grade PET production base in Nigeria through a joint venture.
On the evening of the 6th, the relevant person in charge of the company told the Finance Association, “Overall, the consumption of bottle-grade PET in Africa exceeds supply. There are very few local bottle factories, and they need to rely on imports. Nigeria is the most populous country in Africa. The market capacity is large enough, and there is a corresponding petrochemical industry base in the region.”
A reporter from the Financial Association News Agency learned that the company's overseas trip this time was the “first launch” of the bottle film industry. The person in charge mentioned above mentioned mentioned, “The initial project was not big. We also tested the waters of the local market and waited until it stabilized before expanding. The sales price of products in Africa is higher than in the domestic market, and the (product) profit margin will be higher than the company average.” At present, the company's products have been sold to Russia, Egypt, Nigeria and other countries along the “Belt and Road”.
According to the announcement, Wankai New Materials will jointly invest 45 million US dollars (including Chongqing Wankai's investment of 29.25 million US dollars) through a 100% controlled subsidiary, Chongqing Wankai New Materials Technology Co., Ltd. and XJP Trading Co., Ltd. to establish a new SSP device with a production capacity of 300,000 tons/year in Nigeria, which can form a production capacity of 300,000 tons of new food-grade PET materials per year after completion.
The project is planned to have a total investment of 329 million yuan. The construction period is two years. The funding source is self-financing. The person in charge mentioned above mentioned that construction of the project will begin next year, and production is expected to begin in the second half of 2025.
A month ago, Wan Kai New Materials mentioned during a roadshow event that in 2023, the domestic bottle-grade PET annual production capacity base has increased sharply by 3.7 million tons, an increase of 35% over the end of 2022, yet domestic market demand has not increased significantly in line with production capacity. Therefore, the company is speeding up the layout and construction of overseas production capacity to places with higher gross margins.
Bottle-grade PET products are processed by downstream packaging companies into PET bottles and are widely used in food and beverage, daily chemicals, medical and pharmaceutical packaging fields. Domestic production capacity accounts for about 35% of the world's total production capacity, and is concentrated in leading companies such as Wankai New Materials, Sanfangxiang (600370.SH), Yisheng Petrochemical, and China Resources Materials (301090.SZ). The industry believes that judging from the current planned production capacity of major manufacturers, the pace of PET production capacity investment in the industry may slow down or decline markedly next year.