Tianyuan Group: Top Manufacturer of PVC Resin    

Yibin Tianyuan Group Co., Ltd. (Tianyuan Group) located in Yibin, Sichuan province. It has 70 years of history for manufacturing caustic soda and more than 40 years for polyvinyl chloride resin (PVC resin).
    At present, Tianyuan Group can produce 520 000 tons of PVC resin and 418 000 tons of caustic soda every year, making it China's second largest manufacturer that uses calcium carbide process to make PVC resin. Tianyuan Group's chlor-alkali business also has kept fast growing in southwestern China in recent years and contributed about 77.2% of the total sales revenue for the company in 2009. The company also developed downstream products like sodium tripolyphosphate and hydrazine. It now has a capacity of 15 000 t/a hydrazine, 820 000 t/a cement and 80 000 t/a sodium tripolyphosphate.

Capacity expansion

In March 2010, Tianyuan Group announced its RMB907 million investment plan for expanding its capacity of PVC resin to 920 000 t/a. The new capacity will use the company's independently developed dry process to generate acetylene - raw material for PVC. The company says the newly built facility will start up in 2010 and contribute 320 000 tons of PVC resin to the company, and will reach full load in 2011. It is estimated to add annual sales revenue of RMB2.8 billion for the company when full operational.
   This expansion also has two matching projects: 320 000 t/a ion-membrane caustic soda (279 000 t/a for sale, including 129 000 t/a liquid and 150 000 t/a solid) and 20 000 t/a hydrazine (80% content). These two projects have a total investment of RMB900 million. The two projects will come on stream in 2010 and are projected to bring to Tianyuan Group with annual sales revenue of RMB952 million.
    On March 30th, 2010 Tianyuan Group issued stock in China to raise fund for about RMB1.54 billion for the construction of the three projects.

Plans in future

A manager of Tianyuan Group said the company will explore the upstream products in the future. Calcium carbide is a key raw material for PVC resin manufacturing, accounting for 75.55% of PVC total cost in 2009. The company's comprehensive gross profit rate of PVC resin kept decreasing in past three years: 22.7% in 2006, 18.5% in 2007 and 17.9% in 2008.
    "The fast growing PVC capacity in China may be the biggest answer for such depression," said the manager. "In 2009, China's PVC capacity reached 15.81 million t/a, 6.0 million t/a in surplus. Capacity utilization rate of most PVC manufacturers was under 60%, and fierce competition narrowed the profit."
    "Tianyuan Group also has expanded its PVC capacity in recent years, but it has not yet found feedstock base for its PVC expansion. The enlarged demand for calcium carbide can not be satisfied. The consecutive price rise of calcium carbide these years even aggravated this situation."
    "Tianyuan Group plans to set up a production base to provide feedstock, like coal and calcium carbide. Hope this move works."
   "In 2009, China's commercial residential building sales area reached 937.1 million square meters, up 42.1% year on year; Car sales were 46% up. In China, about 40% of PVC resin is consumed in the house building industry. These two sectors are expected to keep robust in 2010 and will drive the consumption growth of plastic products."
   "The company's gross profit of PVC resin has kept increasing since the beginning of 2009. The sales revenue was RMB3.69 billion in 2009 and net profit was RMB183 million."
   Some experts estimate that the global demand for PVC resin will keep average annual growth rate of 2.0% in 2010-2012, and most will be from the Asia-Pacific market and southern Asia market. So Tianyuan Group will enlarge export of PVC resin to these regions.