Benchmarking Japan's Kuraray, Polymer Leader Announces 10 Billion Yuan Mega Project, H1 Net Profit Surges 107%

On August 15th, Anhui Wei High-tech released an announcement stating that the company has signed an investment agreement with the Jiangsu Binhai Economic Development Zone Management Committee for the construction of a project involving ethylene-based functional polyvinyl alcohol resin. According to the agreement:

(1) It is planned to invest in the construction of a functional polyvinyl alcohol resin production base using the ethylene process in the Binhai Coastal Industrial Park. The total planned investment is approximately 10 billion yuan, covering an area of about 1,000 mu.Overall plan for an annual production of 400,000 tons of ethylene-based functional polyvinyl alcohol resin and downstream industrial chain project.

The project will be constructed in two phases.The construction period of the first phase of the project is expected to be 18 months, and after commissioning...Start Phase II project at an appropriate time. Phase IWith an investment of approximately 3.6 billion yuan, a 200,000-ton/year ethylene-based functional polyvinyl alcohol resin project will be constructed, including supporting facilities for a 360,000-ton/year vinyl acetate unit and a 300,000-ton methyl acetate unit. Invest approximately 6.4 billion yuan to construct projects with an annual output of 400,000 tons of vinyl acetate, 200,000 tons of ethylene-based functional polyvinyl alcohol resin, and downstream PVA industry chain products such as VAE emulsion, redispersible latex powder, PVB resin, and PVB film.

(2) It is planned to establish "Jiangsu Wanwei New Materials Co., Ltd. (tentative name, hereinafter referred to as 'Wanwei New Materials'), with a registered capital of 1 billion RMB, located in the Coastal Industrial Park of Binhai Economic Development Zone, Binhai County, Yancheng City, Jiangsu Province. Among the investors, Wanwei High-tech and Binhai Investment will contribute 800 million RMB and 200 million RMB respectively, holding 80% and 20% equity respectively. Wanwei New Materials will operate independently the first phase project with an annual capacity of 200,000 tons.

Polyvinyl alcohol (PVA) is primarily used in the production of coatings, adhesives, paper processing agents, emulsifiers, dispersants, and films. Notably, the complete biodegradability of PVA makes it an ideal choice for packaging, separation and purification, and biomedical fields. Additionally, it holds potential in emerging areas such as lithium-ion battery separators and hydrogels.

The main synthesis processes for PVA include the calcium carbide acetylene method, the natural gas acetylene method, and the petroleum ethylene method. Among these, the calcium carbide acetylene method is the primary method used in China, while the mainstream international method is the ethylene process developed by Japan’s Kuraray, which offers advantages in cost, quality, performance, and low carbon emissions. This method represents the main trend for future development in the industry.

Regarding the reasons for the investment in this project, Wanhua Weigao aims to fully utilize the rapidly increasing petrochemical ethylene production capacity along China's coast, as well as the abundant new energy and port resources. By leveraging the comprehensive competitive advantages of the ethylene-based PVA production route, the company seeks to seize the forward-looking development opportunities in the industry, which will facilitate its transition towards high-end and green development.Covering both land and sea, purchasing and sales can simultaneously radiate to domestic and international markets.On the other hand, it is also a proactive move to address the current intense competition and consolidate the company's leading position in PVA (with a domestic market share of over 40%).

China has become the world's largest producer of PVA, with a production capacity of approximately 1.1 million tons. At the same time, it is also the world's largest exporter of PVA. In 2024, PVA exports reached a record high of 210,200 tons, an increase of about 14.3% year-on-year. Domestic PVA production capacity is increasingly being released to overseas markets.

Key global PVA enterprises includeJapanese companies such as Kuraray, Sekisui Chemical, and Nippon Synthetic Chemical, as well as Chinese companies including Anhui Wanwei High-Tech, Chuanwei Chemical, Inner Mongolia Shuangxin Environmental Protection, Ningxia Dadi Recycling, and Taiwan’s Chang Chun Group, are active in this field. Among them, Wanwei High-Tech is the largest domestic producer by capacity, while Chuanwei Chemical ranks first in China and among the world’s leaders in special PVA production capacity (planned at 210,000 tons). Recently, the environmental impact assessment was conducted for Inner Mongolia Shuangxin Environmental Protection’s project with an annual output of 150,000 tons of ethylene-based vinyl acetate and 60,000 tons of special polyvinyl alcohol.Second Announcement.

It is worth mentioning that PVA optical films are the core films of polarizers, which are key materials for liquid crystal displays. The global market is mainly dominated by two companies, Kuraray and Sekisui Chemical, with Kuraray accounting for about 80% of the global production capacity and monopolizing the PVA raw material market for films. Domestically, only Wanwei High-tech and Taiwan's Chang Chun Group produce small quantities of narrow-width films supplying the low- to mid-end market, with a market share of less than 1%.

It is reported that Wanwei Hi-Tech has successfully developed 30μm thick wide-width PVA optical films. After trial use by downstream polarizer manufacturers, the product performance is excellent. Currently, 7 million square meters per year of wide-width PVA optical films have been stably produced and supplied to the market in batches. The newly constructed project for an annual output of 20 million square meters of wide-width PVA optical films for TFT polarizers is scheduled to be put into operation in the second half of the year. In addition, in July this year, the company announced the successful delivery of the domestically first-of-its-kind key core equipment for the localization of large-size polyvinyl alcohol optical films.

In addition to this 10-billion-yuan project, on the same day, Anhui Wanwei High-Tech also announced that its board of directors had decided to plan the 6,000-ton/year high-performance polyvinyl alcohol (PVA) fiber project (concrete reinforcement material) by Inner Mongolia Shangwei New Materials Co., Ltd. in Shangdu County, as a replacement for the company’s originally planned 6,000-ton/year water-soluble PVA fiber production line project in 2022.

Reasons for replacing the project plan: On one hand, the water-soluble PVA fiber project faces environmental issues such as difficult wastewater treatment. At the same time, the emergence of alternatives like modified natural fibers and water-soluble polyester fibers has led to a decline in market demand for water-soluble PVA fibers. On the other hand, the production line at the company's Dawei branch is outdated, and the PVA raw material used is the conventional 1799 type, supplied entirely by Mengwei Technology, resulting in high transportation costs. Therefore, the company needs to benchmark against Japan's Kuraray to upgrade its process technology and equipment, improve product quality, and further strengthen its leading position in high-strength and high-modulus PVA fibers (with a 50% market share).

It is reported that after the change, the total investment of this project will be 197.8933 million yuan (including 188.48 million yuan for construction investment), with a construction period of 18 months. It is planned to purchase one set of high-performance PVA fiber equipment with a production capacity of 6,000 tons, adopting mature wet spinning technology. PVA raw materials will be procured nearby from Mengwei Technology to reduce transportation costs.

On the same day, August 15, Wanwei High-tech released its semi-annual performance report stating that the operating revenue for the first half of 2025 was approximately 4.061 billion yuan, a year-on-year increase of 4.9%; the net profit attributable to shareholders of the listed company was approximately 256 million yuan, a year-on-year increase of 97.47%; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 244 million yuan, an increase of 107.35% compared to the same period last year.

The growth in performance was mainly due to a significant increase in the production and sales volumes of multiple products. In terms of production, the total output of PVA series products was 152,700 tons, up 33.17% year-on-year; the total output of VAE emulsion products was 71,000 tons, up 3.65% year-on-year.

In terms of sales, the leading product, PVA, reached a sales volume of 125,500 tons, an increase of 24.51% year-on-year. Sales of PVA optical film and PVB resin products grew by 120.58% and 260.06% respectively. The revenue share of emerging industries rose to about 40%. PVA exports increased by 43.36% year-on-year, methyl acetate by 170.18%, and VAE emulsion achieved a high growth rate of 214.74%. The market share in foreign trade continues to expand, with export earnings of $161 million in the first half of the year, an increase of $46.11 million compared to the same period last year, achieving a growth rate of 39.86% against the trend.

The production of PVA optical film reached 4.2049 million square meters, an increase of 56.72% compared to the same period last year; sales reached 4.3023 million square meters, an increase of 120.58% compared to the same period last year; sales revenue was 48.6464 million yuan, an increase of 100.98% compared to the same period last year.