Construction begins on the project in Bachu, Kashgar Region, owned by Shandong Dongjia Group, to produce 300,000 tons of titanium dioxide per year along with related facilities
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On February 15, the project invested 6 billion yuan by Shandong Dongjia Group, with an annual production capacity of 300,000 tons of titanium dioxide along with related facilities, officially commenced construction in Bachu County, Kashgar Region, Xinjiang. This project is not only one of the largest individual investment projects in China’s titanium dioxide industry in recent years, but it also signifies an acceleration in the trend toward the relocation of China’s titanium dioxide industry to regions rich in resources. It is reported that as the entity responsible for implementing this project, Xinjiang Dongjia New Materials Co., Ltd. was established in August 2024 with a registered capital of 100 million yuan. The company is 100% controlled by Shandong Dongjia Group Co., Ltd., and its registered address is in the industrial park of Bachu County, Kashgar Region, Xinjiang. The Dongjia Xinjiang 300,000-ton titanium dioxide project involves the construction of 300,000 square meters of new factory facilities, as well as production lines capable of producing 300,000 tons of titanium dioxide per year, 900,000 tons of phosphoric acid, 180,000 tons of ammonium sulfate, and 900,000 tons of ferrous sulfate in aqueous solution. This represents a major strategic move by Xinjiang Dongjia New Materials Co., Ltd. to expand its production capacity. Shandong Dongjia Group is one of the leading companies in China’s titanium dioxide industry, with 60 years of experience in the research and production of titanium dioxide. Its current annual production capacity for titanium dioxide amounts to 200,000 tons, and its products are widely used in fields such as coatings, plastics, and new energy batteries. This Xinjiang project marks its first large-scale expansion outside Shandong. China is the world’s largest producer of titanium dioxide, with a total production capacity of 5 million tons in 2023, accounting for over 60% of the global total. The industry features a pattern of \"one leader and several strong competitors\"; Longbai Group leads with an annual production capacity of 1.5 million tons, followed by companies such as China National Titanium White and Shandong Dongjia. Although the industry is currently facing pressure from overcapacity, the new energy sector offers a new source of growth for titanium dioxide – there is a surge in demand for lithium iron phosphate cathode materials, and ferrous sulfate, a by-product of titanium dioxide production, serves as a key raw material for these materials.
Dongjia Group’s decision to expand production at this time has clear strategic intentions. Seizing the opportunity in new energy materials, entering the lithium battery industry through the integration of the \"titanium dioxide-ferrous sulfate-lithium iron phosphate\" industrial chain ； Seizing the opportunity in new energy materials: Entering the lithium battery industry through the integration of the “titanium dioxide-ferrous sulfate-lithium iron phosphate” industrial chain ； Improved cost competitiveness: The sulfuric acid production line built as part of the Xinjiang project can reduce raw material costs by 30% ； Enhanced export advantages: Leveraging the location of the China-Pakistan Economic Corridor to reach markets in Central and South Asia. In particular, the decision by Dongjia Group to establish a new project in Bachu County, in the Kashgar region of southern Xinjiang, highlights the dual advantages of Bachu County in terms of resources and policies. Bachu County is located in the heart of southern Xinjiang, adjacent to the import routes for titanium ore resources from Central Asia. The area is rich in sulfur and coal resources, which can meet the needs for titanium concentrate, sulfuric acid, steam, and other materials required for the production of titanium dioxide. Secondly, in terms of energy costs, Xinjiang’s industrial electricity price is as low as 0.3 yuan per kilowatt-hour, which reduces energy consumption costs by 40% compared to the eastern regions. In accordance with the local investment promotion policies, investing in local economic projects entitles one to tax incentives under the Western Development Initiative (corporate income tax is levied at a reduced rate of 15%) as well as subsidies from the Kashgar Special Economic Zone. Finally, within the circular economy industry chain that is being developed in the region, the new energy materials industrial park serves as the core of this industry; it can work together with lithium battery and photovoltaic enterprises to form an industrial cluster, thereby enabling different companies within the chain to benefit from the synergies that come from coordinated development. In recent years, Shandong Dongjia has accelerated its strategic adjustments: on the one hand, it has expanded the use of ferrous sulfate, a by-product of its titanium dioxide production, in the field of new energy; on the other hand, it has strengthened its global presence. Data shows that overseas sales accounted for 35% in 2023, and the project in Xinjiang will help enhance coverage in the markets along the Belt and Road Initiative. The titanium dioxide industry is undergoing structural adjustments, and companies with resources, technology, and the ability to integrate the supply chain are likely to emerge victorious in this reshuffle. The commissioning of the Dongjia Xinjiang project is likely to further increase industry concentration, while also accelerating the expansion of titanium dioxide from traditional applications into the new energy sector. Once the Shandong Dongjia Xinjiang project is completed, it will further extend the vanadium-titanium industry chain in Bachu County, contributing to the development of a new hub for green mining in southern Xinjiang.