Shandong Helon: Leading Enterprise in Viscose Staple Fiber Sector      

Shandong Helon Co., Ltd. (SZ: 000677) is engaged in viscose staple fiber, viscose filament fiber, cotton pulp, cord fabrics and canvas, and non-woven fabric. It is a leader in the viscose staple fiber sector in China. The company has many outstanding competitive advantages compared with other enterprises in this sector.

1 Prominent advantage in scale and complete integration of industrial chain

The company can produce 130 000 t/a cotton pulp, 120 000 t/a viscose staple fiber, 8 000 t/a viscose filament fiber, 6 000 t/a high-modulus low-shrinkage polyester industrial filament fiber, 24 000 t/a cord fabrics and canvas, and 4 500 t/a non-woven fabric. The viscose staple fiber capacity is an outstanding advantage. Last December, the company announced an issue of not more than 80 million shares to raise RMB324.59 million for a 30 000 t/a differential staple fiber project. In addition, the company signed a cooperation agreement with Xinjiang Talimu Agriculture Development Co., Ltd. (SH: 600359) last July. Both parties will invest and jointly launch a 100 000 t/a cotton pulp project and a 80 000 t/a viscose staple fiber project. (CCR2007, No. 20) It is expected that the production capacity of viscose staple fiber in the company will be around 250 000 t/a in 2009, maintaining its leading position in China's viscose staple fiber sector.
   At a time of constant capacity expansion for viscose staple fiber, the supply of cotton pulp is becoming tight in China. Quite a few enterprises have found it necessary to extend their businesses to upstream sectors. Future competition between viscose staple fiber producers will include ensuring supplies of raw materials.
   Shandong Helon Co., Ltd. has the most complete viscose fiber industrial chain in China. It makes a complete series of products from cotton pulp and viscose fiber to non-woven fabric. The cotton pulp they produce is mostly used internally in fiber production. The price of cotton pulp has increased constantly in recent years so many viscose fiber enterprises can hardly bear the cost of raw materials. In such market conditions, the advantages of a company integrating its industrial chain internally are obvious.

2 Strong advantages in technology and product development

In the fierce competition of the viscose fiber sector, conventional varieties are in surplus and related profits are narrowing. The focus of development will gradually shift to differentiated fibers to meet diversifying demands in downstream consumption. Future competition between viscose fiber producers will be mainly in controlling technology and increasing the production scale.
   Shandong Helon Co., Ltd. is the base designated by the China Textiles Development Center for the development of functional viscose products. It has held a leading position in the development of differential fibers for many years. The company has developed more than a dozen products with high technology and high added value such as fibers with high whiteness, flame retarding fibers, fibers with high wet modulus, fibers for health care and cotton pulp with a high degree of polymerization. The firm's fibers for health care have reached international standards. The other four varieties including fibers with high wet modulus and flame retarding fibers have filled gaps in the domestic supply.

3 Advantage in environmental protection

With greater efforts made by the state to conserve energy and reduce emissions, treating pollutants in viscose staple fiber production and cotton pulp production will to a great extent determine the operating parameters and the competitiveness of enterprises. Some enterprises have already been shut down in recent years because their emissions fail to reach the standard.
   Shandong Helon Co., Ltd. owns the most advanced waste water treatment technology in China and operates complete waste water treatment plants. It has passed the ISO14001 environmental management system certification and the OHSAS18001 occupational health and safety management system certification and a foundation has been laid for its sustainable development.

4 Advantage in geographical location

Viscose staple fiber in China is consumed mainly in Jiangsu, Zhejiang and Shandong, the three major textile producing provinces, which account for more than 50% of the national total. Shandong Helon Co., Ltd. is located in Weifang, Shandong province, close to major downstream consumption regions, so the company has a natural logistical advantage.
   On the upstream side, Shandong is also one of the biggest cotton producing regions in China, accounting for around one third of the national total. Shandong is also a major producer of chemical products. The company therefore has an adequate supply of raw materials such as short fibers, sulfuric acid and caustic soda.