Changhua Chemical’s Announcement on Annual Production of 80,000 Tons of Carbon Dioxide Polyethers in Lianyungang

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On October 14, Changhua Chemical released the \"Draft Plan for Issuing Shares to Specific Parties via Simplified Procedure in 2025 (Revised Version)\\", proposing to raise a total amount of no more than 155 million yuan. The net amount of funds obtained after deducting issuance costs will be used for the carbon dioxide polyether project (Phase I). It is reported that the entity responsible for implementing this project is Changhua Chemical Technology (Lianyungang) Co., Ltd., a wholly-owned subsidiary of the issuer. The total investment in this project amounts to 742,948,500 yuan. Once completed, it will have an annual production capacity of 80,000 tons of carbon dioxide polyethers, thereby meeting the company’s needs for high-performance green polyether products. Through this project, the company will gradually transform into a supplier of polyurethane solutions that combine high performance, carbon neutrality, and recyclability, thereby enhancing customer loyalty and brand value. From 2022 to 2024, overall demand in the polyether industry continued to grow, with a compound annual growth rate of 15.15%; export demand showed particularly strong growth trends ； However, due to factors such as intensified price competition resulting from the homogeneous expansion of production capacity in the industry, and fluctuations in the prices of upstream raw materials, the overall profitability of the industry has declined. In response to this, in addition to enhancing their profitability by reducing costs and improving efficiency, polyether manufacturers need to develop high-end products that meet market demands and optimize their product portfolio to boost their overall competitiveness. Meanwhile, green and low-carbon development has become a consensus across society, and the establishment of carbon footprint management systems has led to a significant increase in downstream customers’ demand for low-carbon products. In recent years, the \"dual carbon\" goal has become the target for transformation and upgrading in the global chemical industry, prompting international chemical giants to accelerate their efforts toward green transformation and the development of a circular economy. For example, BASF has launched a new corporate strategy titled “Winning the Future,” with the goal of achieving net-zero greenhouse gas emissions in production, energy use, and raw material procurement by 2050 ； Covestro is also committed to achieving climate neutrality by offering zero-carbon footprint specifications for all its products, with the goal of reaching climate neutrality and net-zero emissions by 2035. Over the past five years, demand in the polyether industry has shown a slight downward trend, with an average growth rate of 6.38% over this period. Export growth has been a highlight in the development of the polyether industry in recent years, with a compound growth rate of as high as 23.41% over the same period. In 2024, the downstream consumption volume was 4.185 million tons, representing a year-on-year increase of 10.63%. Downstream, it is mainly related to the health of the real estate sector and the development of industries such as automobiles. Among them, the outstanding performance of new energy vehicles continues to create new business opportunities for the development of the polyether industry. Polyurethane products are an important component of plastics used in vehicles, and increasing the use of low-carbon and recyclable polyurethane products in vehicles holds great significance for the export prospects of China’s automotive industry. Carbon dioxide polyethers are produced through an alternating copolymerization reaction between carbon dioxide and propylene oxide. However, the copolymerization of carbon dioxide with epoxides presents high technical barriers; since carbon dioxide is an inert gas, catalysts have low efficiency in facilitating this copolymerization process, which hinders the development of carbon dioxide polyethers. Developing new, efficient and inexpensive catalysts as well as low-temperature and low-pressure processes represents a technical challenge for the carbon dioxide polyether industry. In June 2022, the company signed a Joint Development and Licensing Agreement with Econic, under which Econic agreed to license its existing carbon dioxide polyether catalyst technology to the company for use in China. The two parties collaborated on the development of technologies for producing carbon dioxide polyethers, with the resulting achievements shared between them. Since 2022, the company has continued to increase its investment in research and development, resulting in a series of patents that further strengthen the technical foundation for carrying out its carbon dioxide polyether project.