Hualu Hengsheng to Expand Acetic Acid Business       

Shandong Hualu Hengsheng Chemical Co., Ltd. (Hualu Hengsheng, SH: 600426) said on August 12th it plans to expand its acetic acid facility from 200 000 t/a to 800 000 t/a and build an auxiliary coal gasification project to expand in the coal-based chemicals business.
   The project is expected to cost RMB4.42 billion and take three years to construct. The company's existing 200 000 t/a acetic acid plant started operation in April 2009, and all the products produced have been sold up with the growing demand for acetic acid. The acetic acid project has become a new profit growth engine for the company.
   The expansion of the acetic acid business would help Hualu Hengsheng expand market share for acetic acid, further tap the downstream industries and increase its products' added value. This will effectively increase the company's competitiveness.
   As the funding is quite huge, the company said it will use internal capital, bank lending, share placement to ensure the smooth construction of the project.,
   Hualu Hengsheng reported the operating revenue of RMB1.889 billion in the first half, up 1.72% over a year earlier. Net profit was down 9.98% to RMB231 million, or RMB0.466 a share. By product segment, its urea business posted sales revenue of RMB1.04 billion, basically flat with a year earlier. But the segment's gross margin was down 6.56 percentage points from a year earlier due to a weak domestic urea market and a slump in selling prices. DMF (dimethyl formamide) business has posted sales of RMB466 million, down 22.03%. The DMF product's gross margin was up 3.93 percentage points thanks to lower energy costs.
   In addition, trimethyl amine and acetic acid units registered sales of  RMB145 million and RMB97.64 million, with operating profit margins standing at 14.44% and 16.83% respectively.