Rubber chemical firm tackles waning profitability on pale demand

Shandong Yanggu Huatai Chemical Co., Ltd., a backbone enterprise of China’s rubber chemicals industry, said its net profits in the first half of this year fell by 31.82% year on year to 7.44 million yuan, while its operating revenues in January-June came to 182.90 million yuan, a slight increase of 1.84% year on year.

Demand for rubber chemicals has been slack along with the slowdown of both the automobile and tire industries.

In the first half of this year, Yanggu Huatai put several projects into operation. However, the company’s financial report shows that only three projects made profits, while many others were still struggling to make ends meet.

The three profitable projects included a pre-dispersed rubber chemicals project with annual output capacity of 10 million metric tons, a retarder CTP project with annual capacity of 10,000 metric tons, and a new-type rubber chemical project with annual capacity of 65 million metric tons.

Sources with the company said that a large proportion of these new projects were in trial operation, and consequently shored up production costs. But with more projects to operate on full capacity, the company’s profitability is expected to improve in the coming months.

(Contributed by Olivia, olivia@tireworld.com.cn)