Wanhua Chemical Establishes Three New Companies

[DT New Materials] has learned that following the establishment of Yantai Wanhe Flavors Co., Ltd. in May to further invest in the large fragrance and flavor industry, Wanhua Chemical has recently set up three new companies in succession, laying out five major industries.

The first company, Hubei Xinghua Silicon Materials Co., Ltd.Established on June 19, 2025, with Sun Gang as the legal representative, it was jointly funded by Xingfa Group and Wanhua Chemical with a shareholding ratio of 51% to 49%, and a capital injection of 50 million yuan.

The company is undertaking the construction of the Xinghua Silicon Materials Technology R&D and Industrialization Project, with a total investment of 5.4 billion yuan and a land area of over 1,000 mu. The project is scheduled to start in September 2025 and will mainly involve the construction of production facilities for deep-processed organic silicon products such as packaging adhesives, thermal conductive potting adhesives, silicone resins, as well as electronic-grade phosphine, photoinitiators for photoresists, electronic-grade hydrogen peroxide, and electronic-grade sulfuric acid. Supporting facilities will include the construction of seven R&D laboratory buildings, among others.

The second company, Yantai Huaxing Silicon Materials Co., Ltd.The company was also jointly established by Xingfa Group and Wanhua Chemical on July 31, 2025, with the shareholding ratio reversed at 49% and 51%, respectively. It was capitalized at 5 million yuan, with Deng Junying as the legal representative. Its business scope includes the sales of high-performance sealing materials, synthetic materials, surface functional materials, and high-quality synthetic rubber.

Reportedly, in the field of electronic chemicals, Xingfa Group ranks among the industry leaders in terms of production capacity. By the end of 2024, its subsidiary Xingfu Electronics will have completed the construction of facilities with annual capacities of 60,000 tons of electronic-grade phosphoric acid, 100,000 tons of electronic-grade sulfuric acid, 30,000 tons of electronic-grade hydrogen peroxide, 54,000 tons of functional wet electronic chemicals, and 20,000 tons of electronic-grade ammonia co-produced with 10,000 tons of electronic-grade ammonia gas. The company is also advancing projects such as a 40,000-ton/year ultra-high-purity electronic chemicals project and the expansion of electronic-grade hydrogen peroxide production. Its products have already achieved mass supply to customers such as SMIC, Hua Hong Group, SK Hynix, and Yangtze Memory Technologies. The average gross profit margin in 2024 is approximately 26.99%.

In terms of the organic silicon business, Xingfa Group is also one of the domestic leaders. The company has a designed production capacity of 600,000 tons/year for organic silicon monomers, with supporting capacities of 120,000 tons/year for 110 silicone rubber, 120,000 tons/year for 107 silicone rubber, 60,000 tons/year for sealant, and 56,000 tons/year for silicone oil. There is an ongoing construction project for 80,000 tons/year of functional silicone rubber (among which 50,000 tons/year of photovoltaic silicone and 10,000 tons/year of liquid silicone rubber have been completed), and 2,200 tons/year of organic silicon microcapsules (with the first phase of 550 tons/year already completed and put into production). In 2024, the gross profit margin is -3.99%, a decrease of 8.10 percentage points, mainly due to the impact of market price declines.

Furthermore, Xingfa Group is also a leading enterprise in China's phosphorus chemical industry. Previously, Wanhua Chemical and Xingfa Group jointly invested to establish Yuan'an Xinghua Phosphorus Chemical Co., Ltd. (Wanhua holds 49% of the shares), Yuan'an Xinghua Mining Co., Ltd. (Wanhua holds 55% of the shares), and Yantai Huaxing Phosphorus Chemical Co., Ltd. (Wanhua holds 51% of the shares).

Yu'an Xinghua Mining invested in the construction of a 35,000-ton/year BDP organic phosphorus flame retardant in the Chemical Industry Park of Yuan'an County.

The establishment of Yantai Huaxing Phosphorus Chemical will open up the supply chain for a key raw material for lithium iron phosphate in the Shandong region—phosphate rock. Previously, Wanhua Chemical had already made significant strides in important intermediate materials such as battery-grade phosphoric acid by acquiring shares of Liuguo Chemical from Tonghua Group. Externally, Wanhua Chemical, in collaboration with Tibet Mineral Development Co., Ltd. and Beijiete, established the Tibet Salt Lake Green Comprehensive Development and Environmental Protection Joint Laboratory, completing its upstream layout for lithium carbonate.

The third company, Yantai Wanmei New Materials Co., Ltd.Established on July 25, 2025, with a registered capital of 100 million yuan, it is a joint venture founded by Wanhua Chemical and Hefei Xinmei Materials with a shareholding ratio of 70% to 30%. Its business scope includes the research, development, and sales of synthetic materials and specialized chemical products.

According to information, Hefei Xinmei Materials was established in September 2023, jointly formed by Hefei Industrial Investment and multiple state-owned capital entities including Nuoyan Capital, with a registered capital of as high as 4.19 billion RMB. The company's biggest highlight is the acquisition of LG Chem's (LGC) polarizing film materials business, along with all related intellectual property, equipment, and core personnel, with the transaction completed in January this year.

In March this year, Xinmei Materials officially started construction of an optical functional film project with a total investment of approximately 4.5 billion yuan. The project plans to build five intelligent display material production lines, including two precision protective film production lines, one PO production line, and two surface coating production lines, covering LCD/OLED polarizers and key raw materials supporting OLED. Upon completion, the project will achieve an annual production capacity of approximately 50 million square meters for surface treatment films, 80 million square meters for protective films, and 20 million square meters for PO materials.

Currently, the core TAC film of optical films and the resin for PVA optical films are mainly controlled by global giants. With the entry of Wanhua Chemical, both parties may accelerate the localization of key materials such as COP and optical-grade PMMA.

Up to now, Wanhua Chemical has completed cooperation in the two major industries of "phosphorus" and "silicon" through multiple alliances, establishing three full industrial chains: "phosphate rock - flame retardants - engineering plastics," "phosphate rock - lithium carbonate - lithium iron phosphate - batteries," and "resin synthesis → optical film manufacturing." The company has laid out its organic silicon industry and further strengthened its electronic chemicals business (including its original high-purity electronic specialty gases and other products).