China Sunsine expanding rubber chemicals production

Singapore – China Sunsine Chemical Holdings Ltd is expanding its production of rubber chemicals as competition remains 'intensive' in the Chinese rubber chemicals industry.

As part of the move, the speciality chemicals supplier said it will introduce a "phase 2" project for the production of insoluble sulphur, with a nameplate capacity of 30 kilotonnes per annum.

The project is estimated to be completed by the end of the year, said China Sunsine in a 3 May securities filing, without giving further details about the location of the project.

Furthermore, the group will add another 20ktpa capacity for the production of “high quality” rubber accelerator MBT.

The project, said China Sunsine, is to be completed by the first half of the year and ready for commercial production in the second half.

The group, claimed to be China’s largest rubber accelerator producer, reported an ‘intensive’ environment within the rubber chemicals sector of the country in the first quarter of the year.

Overall, for the quarter ended 31 March, the group said it sold a total of 52,584 tonnes of products, up 8% year-on-year.

However, revenue decreased by 1% over last year to Yuan851 million (€109 million), due to lower average selling price (ASP).

According to China Sunsine, the ASP in the first quarter decreased by 8% year-on-year to just under Yuan16,000/tonne, mainly due to the lower prices of raw materials, as well as the group’s flexible pricing strategy.

Gross profit margin rose one percentage point to 23.4% during the quarter, due mainly to lower raw material costs.

On the business environment, China Sunsine said the current global economy is “still facing numerous challenges, including weakening international trade, sluggish investment and a high-interest-rate.”

Furthermore, the Ukraine-Russia conflict, the war in Gaza, and escalating geopolitical tensions add to uncertainty.

“In recent years, competition within the Chinese rubber chemicals industry has been intensifying, placing significant pressure on our selling prices,” said the group.

Despite the pressure, China Sunsine said it is confident of its profitability over the next 12 months.

Headquartered in Singapore, China Sunsine has production facilities in Shanxian, Weifang and Diangtao in Shandong province in China.

Across the three sites, it has the capacity to manufacture 117ktpa of rubber accelerators, 60ktpa of insoluble sulphur and 77ktpa of rubber antioxidants.