China Fiberglass Ensures Follow-up Capacity

China Fiberglass Co., Ltd. (600176) accomplished a main-business revenue of RMB1 093.19 million from the beginning of 2005 to the end of the third quarter, an increase of 34.29% over the same period of 2004, a main-business profit of RMB342.1889 million, an increase of 44.4% and a net profit of RMB103.1071 million, an increase of 71.6%. The capacity of fiberglass in the company was 150 000 t/a in 2004 and 210 000 t/a in 2005, an increase of 40% and is expected to reach more than 300 000 t/a in 2006.

Make full use of the extensive market space

According to the latest projection, the average annual growth of the fiberglass capacity in the world will be maintained at around 5% for a considerable period of time in future. The growth rate in the United States is expected to be 2.5% from 2002 to 2007 and the output will reach 1.27 million tons in 2007. The growth rate in Asia will be 7%, much higher than the growth rate in the United States and also higher than the growth rate of 4% in Europe.    The three major fiberglass producers in the world today include OC of the United States, Saint Gobain of France and PPG of the United States. The capacity of fiberglass in OC of the United States is 650 000 t/a. The capacity of fiberglass in Saint Gobain of France is 590 000 t/a. PPG of the United States is the third largest fiberglass producer in the world and its fiberglass capacity is around 400 000 t/a including the capacity in its joint venture enterprises.    The composite annual growth of the fiberglass capacity in China was 8.6% from 1990 to 2000 and reached 34% from 2001 to 2004. The fiberglass production in China has made a rapid growth and the international competitiveness has been enhanced rapidly.

Launch 3 major products to double the capacity

China Fiberglass Co., Ltd. has a total fiberglass capacity of 210 000 t/a in Tongxiang, Jiujiang, Jiangxi province and Chengdu, Sichuan province. For the follow-up capacity expansion, the plan made by the company is to first construct an 80 000 + 20 000 t/a alkali-free production line in Tongxiang. The production line is expected to start ignition in February 2006. Alkali-free production lines will also be constructed in Jiujiang and Chengdu afterwards and the capacity in each place will be 100 000 t/a. The company hopes that it will have a fiberglass capacity of 500 000 t/a at that time and become one of the top 3 fiberglass producers in the world.      New projects being constructed by the company in 2005 include the 80 000 + 20 000 t/a fiberglass project and the 50 million m2/a electronic fabric project.     The civil work of the 80 000 + 20 000 t/a tank-furnace drawing project is already completed and the equipment installation is in full swing. The 80 000 t/a unit uses the large tank-furnace drawing production technology and advanced process in the world. The biggest alkali-free fiberglass tank-furnace drawing production line in the world will therefore be constructed to produce high-tech products such as SMC twist-less roving, transparent sheet yarn, jet twist-less roving and TP chopped grey yarn. The 20 000 t/a unit is an environmental protection project.     Through the technical upgrading of production equipment and the use of world advanced technology and equipment, the capacity of the 40 000 t/a alkali-free tank-furnace drawing production line that started production in September 2004 has reached 60 000 t/a today. The project has expanded the fiberglass capacity and become a new profit growth point in the company. The fiberglass tank-furnace drawing production technology in the company has therefore got on a higher step.    Preparations of placing orders for products of the 80 000 + 20 000 t/a production line already started at the end of 2004. Small amounts of new products to be produced in the 100 000 t/a production line were first produced in the 60 000 t/a production line for the trial-use in clients. Solutions have been found for product sales after the capacity expansion.    The piling work of the 50 million m2/a electronic fabric Chinese-German joint venture project has already started. It is an extension to the downstream industrial chain. In the joint venture project, the Chinese side provides the fiberglass yarn technology and the German side provides the electronic fabric technology. The project will start production in the second half of 2006.

Base production on sales to maintain a balance

China Fiberglass Co., Ltd. has made the production strictly according to product orders. The production plan for 2006 is made on the basis of the annual sales meeting held in Tongxiang in October each year. The company highlights the development of clients, foreign clients in particular, for the large-scale capacity expansion. As the demand of fiberglass in the world is still making a constant growth, the number of clients in the company keeps going up.