Breaking: COFCO Tech Confirms PLA to Start Production Around End of Q1

On February 2nd, COFCO Biochemical (000930) announced that its 30,000-ton lactide (biodegradable material) project in Bengbu, Anhui, is accelerating construction and is expected to commence production around the end of the first quarter.

Bio-based new materials business (including PLA downstream industry chain extension) is a strategically emerging layout for the company, leveraging existing corn deep processing capacity to form integrated synergistic advantages, opening up the industrial chain, breaking technological monopolies, and achieving independent control of each link. The business aligns with the national strategies of dual carbon goals and agricultural modernization, and is expected to be put into production in the first quarter of this year.

Reasons for the delay of the lactide project

The project's location was optimized and adjusted, moving it from the northeast to the Anhui base. After the relocation, extensive design optimization, equipment adaptation, and installation and debugging work are required, considering Anhui's local climate, geological conditions, and energy consumption standards. Concurrently, the change in location has triggered a series of subsequent coordination tasks, such as port and adjustments to relevant cooperation contracts, which have consequently led to a delay in the project's progress.

此次选址搬迁，是综合评估原料供应、下游销售市场（核心集中在南方）、高温运输成本及能耗效率等多方面因素后确定的最优方案，长远来看更利于项目降本增效，保障项目长期稳健运营。

2. Long-term prospects and capacity planning for the lactide business.

The long-term prospects for the polylactic acid business are clearly defined.

Short-term impact from industry cycles and intense competition in traditional applications (such as plastic bags and straws).

In the long run, as the core foundation of bio-based new materials, it is both an important support for practicing the national agricultural modernization strategy and solving the problem of white pollution in soil, and can also extend to high-end application scenarios such as 3D printing. The key to its core development lies in broadening the application boundaries and increasing the added value of products, with significant long-term growth potential.

In terms of production capacity planning, the company adheres to the principle of prudence and caution. The primary task is to ensure the smooth commissioning and stable operation of the first 30,000-ton capacity. In the future, the company will extend downstream to the polylactic acid (PLA) sector, based on market demand and industry prosperity, to complete the layout of the bio-based new material industry chain and further enhance business competitiveness.