Jiangsu Supor: Will continue to expand production capacity through mergers and acquisitions

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Jiangsu Supor: Will continue to expand production capacity through mergers and acquisitions. Author/Source: Date: 2022-03-15 Clicks: 16. On the evening of March 14, Jiangsu Supor (600746.SH) released its annual report for 2021, which showed that the company’s revenue last year was approximately 8.004 billion yuan, an increase of 110.89% compared to the previous year； The net profit attributable to the shareholders of the listed company was approximately 2.402 billion yuan, representing a year-on-year increase of 938.45%. Reporters from Cailian News noticed that, compared with the company’s performance reported in its semi-annual report last year, the growth rates of Jiangsu Supor’s revenue and net profit have slowed down slightly. Relevant data show that Jiangsu Supor’s revenue in the first half of last year was 3.918 billion yuan, representing a year-on-year increase of 161.01%; its net profit was 1.504 billion yuan, with a year-on-year increase of 17,594.51%. Industry insiders told reporters from Cailian News that last year, the highest price of acetic acid was reached in September, after which its price kept falling; therefore, it is reasonable for acetic acid manufacturers to see slightly lower performance in the second half of the year compared to the first half. According to reporters from Cailian News, last September, Jiangsu was affected by the policies regarding energy consumption limits, and its production rate dropped to around 70%; normal production was only resumed after the National Day holiday, which also had an impact on Jiangsu Supor. In addition, Jiangsu Suopu completed a private placement of 1 billion yuan in March 2021, which was used for the company’s project aimed at improving its acetic acid production technology. This project does not increase production capacity; it merely modifies the carbon monoxide generation technology used in the early stages of acetic acid production, **reducing the cost of producing carbon monoxide and thereby lowering the cost of producing acetic acid. According to Jiangsu Supor’s estimates, once this technical upgrade is completed, the production cost per ton of acetic acid at Jiangsu Supor can be reduced by 150 to 200 yuan. Based on an annual production volume of 400,000 tons, this would result in cost savings of around 80 million yuan. The corporate executive mentioned above told a reporter from Cailian News that the project is still under construction at present and has not had any impact on production in 2021; however, once it is completed, it is likely to lead to a significant increase in product profits. Faced with the strong demand for acetic acid over the past two years, Jiangsu Supor is also planning to expand its production capacity. At the beginning of 2021, Hu Zonggui, chairman of Jiangsu Supor, said in an interview with a reporter from Cailian News that if demand for acetic acid continued to recover and prices rose steadily, Jiangsu Supor would consider building new acetic acid production capacity, as well as exploring options related to market acquisitions. In August 2021, Jiangsu Supor completed the acquisition of 100% of the shares in Dongpu New Materials held by Zhenjiang Guokong. Following this acquisition, Dongpu New Materials was renamed Supor New Materials and became a subsidiary controlled by Jiangsu Supor. According to reporters from Cailian Press, Jiangsu Suopu’s decision to make this acquisition is driven not only by the profitability of Dongpu New Materials’ chlor-alkali products, but also by the fact that the company has 300 mu of industrial land that remains unused ； After acquiring Dongpu New Materials, Jiangsu Supor subsequently purchased more than 300 mu of industrial land in the chemical park where Dongpu New Materials is located, bringing the total to over 600 mu, thereby laying the foundation for future expansion of production.