On Sept. 20, 2012, China National Chemical Corporation (ChemChina) signed a contract with DuPont China Holding Co., Ltd. (DuPont China) in Beijing. According to the contract, DuPont China and Zhonghao Chenguang Research Institute of Chemical Industry Co., Ltd. (Chenguang), a wholly-owned subsidiary of ChemChina, will set up a 50/50 joint venture, namely DuPont Haohua Chenguang Fluoromaterials (Shanghai) Co., Ltd. (DuPont Haohua) in Shanghai. It is reported that DuPont Haohua is estimated to be launched into operation before June 2013 and it will major in production & sales of fluorinated raw-rubbers and fluorinated rubber-compounds, all of which will be supplied to the market at home and abroad. In the contract signing ceremony, both Mr. Ren and Ms. Ellen Kullman, who are respectively the General Manager of ChemChina and the CEO & Board Chair of DuPont China, had attended the ceremony, according to CCM’s October Issue of China Fluoride Materials Monthly Report.
This deal by Chenguang and DuPont will be a win-win co-operation because they can share their own advantages. Based on Chenguang's market advantages, including its fluororubber production bases and the sales channels in China, DuPont Haohua will strive to provide worldwide customers with better solutions in fluororubber applications, combining with the advanced R&D technologies from DuPont.
As to Chenguang, it has certain market advantages of fluororubber production in China. Founded in Feb. 1965, Chenguang now is the largest manufacturer of fluororubber in China with a total production capacity of about 7,000t/a and Chenguang stands for the most advanced technology strength in Chinese fluororubber manufacturing clusters. Currently, the technological capability of fluororubber 26 production in China had nearly caught up with the international level. Chenguang is an excellent example; it had made many technical achievements like: monomers continuous polymerization to produce fluororubber with different fluorine contents after pyrolysis process which decomposes freon and obtains monomer as raw material; feasible control technology on fluororubber production to lower products' mooney viscosity index and widened distribution range of fluororubbers' molecular weight, etc. In Sept. 2009, two R&D achievements about octafluoropentyl alcohol and high fluorine contents rubber were approved by an expert group organized by Science & Technology Department of Sichuan Province. In addition, Chenguang had also developed new products: perfluoroelastomers (similar to DuPontTM Kalrez®) and carboxy nitroso fluororubber— these two had been applied successfully in national defense field.
However, there is some existing problems in most Chinese fluororubber products, and Chenguang's fluororubber product is no exception. Compared with the foreign ones, the species of Chinese fluororubber is few and its processing performance is weak. The species of fluororubber in China is less than 10 while it is nearly 50 abroad, and DuPont alone has about 30. In addition, Chenguang can produce those types of fluororubber, like fluororubber 246, fluororubber TP, fluororubber 23, perfluoroelastomers, fluorinated silicon rubber, carboxy nitroso fluororubber, etc., but the weak processing performance of them hampers their application in China.
From DuPont's perspective, it is beneficial for DuPont's fluororubber business expansion in China. DuPont was the first succeeded in developing fluororubber product and quickly realized its commercialization. In 1956, DuPont successfully launched the equipment into pilot production for fluororubber and, afterwards, established a gross production capacity of 1,800t/a in 1958. Since that, DuPont has strived to develop many different kinds of fluororubber products and to meet consumers' demand based on different processing requirements. Because of the excellent brand reputation, high product quality and, more importantly, the leadership in advanced technologies, up until now, DuPont has been one of the largest fluororubber product suppliers around the world.
However, DuPont has not yet set up any factory to carry out fluororubber production in China. Actually, DuPont only set up DuPont Performance Elastomers Trading (Shanghai) Co., Ltd., a wholly-owned commercial company, to deal with its fluororubber business in China.
China is the most potential market in recent years, whose rapid development in automobile industry, petrochemistry industry, aerospace industry and machinery industry largely accelerated the domestic consumption of fluororubber products. It is note-worthy that automobile industry accounts for about 60%-70% consumption of fluororubber products in China.
During the 11th Five-Year Plan Period (2006-2010), consumption of fluororubber products in China increased largely, mainly thanks to the fast growth of domestic downstream automobile market. The fluororubber product consumption and automobile output respectively increased from 5,000 tonnes and 7,279,000 units in 2006 to about 10,000 tonnes and 18,269,900 units in 2010, with CAGR of 18.92% and 25.87%. In 2011, Chinese automobile output growth slowed to 18,416,000 units, increasing by 0.80% year on year, and it is estimated that the future automobile output growth rate will still maintain low. Fortunately, the other application fields will consume more and more fluororubber products. In general, the consumption of domestic fluororubber products will still increase before 2015.
In contrast with Chinese market, many overseas markets are more likely to encounter sluggish growth in the consumption of fluororubber products. Under the unprecedented impact and the challenge from the European debt crisis in 2011, the global automobile sales market is not estimated to be optimistic in 2012 and even up until 2015, especially in the European region.
In other words, it will promote the sales growth of DuPont's elastomer business. The sales of DuPont's elastomer business slipped in 2009 due to the 2008 financial storm. With economy resurgence, DuPont gradually rehabilitated its elastomer business and the sales kept increasing from 2009 to 2011. However, its year-on-year sales growth rate slowed to 8.40% in 2011, compared with 48.34% in 2010.
If DuPont further expands its market share in China's fluororubber market, it will certainly contribute to the gross sale performance of DuPont's elastomer business. DuPont's elastomers include five brand series: Neoprene synthetic rubber; Vamac® ethylene acrylic elastomer; Viton® fluoroelastomer; Hytrel® TPC-ET thermoplastic polyester elastomer; Kalrez® perfluoroelastomer parts (the Viton®, Hytrel® and Kalrez® belong to fluororubber). Owning many excellent performance, fluororubber can be applied and adapt to different working conditions, thus fluororubber is a high performance material with great market potential.
Source: China Fluoride Materials Monthly Report 1210
http://www.cnchemicals.com/Newsletter/NewsletterDetail_241.html
Main content of China Fluoride Materials Monthly Report 1210:
Chinese fluorite resource being integrated slowly
SDK to launch new product for PFCs exhaust emissions decomposition
Average ex-factory price of R22 in China rebounds in Sept. 2012
2012 second recommendation list for energy-efficient room air conditioner released
Quzhou Lianzhou to expand its capacity of mixed refrigerants to 80,000t/a
Pre-production of Honf Chemical’s new AlF3 production technology succeeds
Chenguang and DuPont sign contract for fluororubber business development
Alltop Fluorine gains support funds from Chinese government
Average price of PTFE to continue to rise
Zhejiang Bailian decides to expand development towards downstream production
Two domestic enterprises get registration ID of florasulam technical in China
Import and Export analysis of fluoride chemicals in China in August 2012
China Fluoride Materials Monthly Report, a monthly publication issued by CCM on 20th of every month, covers the sectors on policy & legislation, company dynamic, supply & demand, price update, etc. of China’s fluoride material market. It will help you follow the dynamic throughout the whole value chain immediately.
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