Guangdong Junnuo Environmental Protection Technology Co., Ltd. (hereinafter referred to as "Junnuo Environmental Protection"), which started with exporting equipment, ushered in an unexpected "global market" in China this year.
"Just last week, we opened our joint venture with LyondellBasel for the recycling of plastic waste to produce the polyolefin polymers our customers need. Wen Liang, general manager of Junnuo Environmental Protection, told Yicai that benefiting from the accelerated development of China's circular economy and favorable policies, the company has returned to China in recent years, and the company has ushered in greater opportunities for internationalization.
The strong growth of global market demand and the further maturity of China's ecological chain have allowed Junnuo Environmental to take an intensive global exhibition footsteps. Wen Liang said that they plan to participate in nearly 50 exhibitions at home and abroad this year, including more than 30 exhibitions abroad. In the last two weeks alone, after ending their appearance at IE Expo Shanghai on April 20, they will appear at ChinaPlas 2024, which opens on April 23.
It's not just this private enterprise that's busy. The event, which returned to Shanghai after six years, also ushered in an unprecedented scale - the number of exhibitors climbed to 4,420, an increase of 12% compared to the 2018 Shanghai exhibition, and the number of domestic and foreign visitors is expected to reach 270,000.
For a large number of foreign investors, the localization in China is not only for the local market, but also a key position to better participate in international competition while grasping China's opportunities and leveraging the advantages of China's supply chain and industrial chain. The joint cooperation between foreign and private enterprises is being flexibly promoted in the domestic and foreign markets in an increasingly diversified and innovative form, and jointly demonstrating resilience. The resource recycling industry, which plans to reach an output value of 5 trillion yuan in 2025, is obviously one of the most lively areas at the moment.
Increased foreign investment in China
After more than 100 years of development, the world's rubber and plastic industry is now booming thanks to the low-carbon goals jointly promoted by the world, and the traditional manufacturing industry has given new vitality. At this year's Chinaplas, words such as green, recyclable, renewable, and zero-carbon can be seen everywhere, and have also become the driving force and focus of multinational companies to increase their investment in China.
Syensqo, which was officially spun off from Solvay last year, achieved net sales of €6.8 billion globally and €1.07 billion in China in 2023. "China remains the country with the greatest development potential and a key engine for global development. Liu Yang, general manager of Syensqo China, told Yicai that the pace of overall capacity destocking has slowed down, and China's production capacity is still expanding in many segments. Syensqo has invested RMB 4 billion in China's R&D and innovation centers since 2005 and continues to increase its R&D investment, which will serve four growth platforms: batteries, green hydrogen, thermoplastic composites, renewable materials and biotechnology. Among them, there are still many technical gaps to be filled in the field of renewable and bio-based.
Currently, Syensqo has 6 production sites and 1 major R&D center in China. Of the more than 1,800 employees, 10 percent work in research and innovation centers. The newly expanded R&D building, which will be completed in 2023, includes a pilot laboratory for the application of high-performance materials and a new laboratory for R&D focused on industrial applications and consumer goods, as well as additional R&D resources for the green hydrogen, electronics and semiconductor sectors.
Covestro made the world premiere of polycarbonate products containing post-consumer chemically recycled raw materials during Chinaplas and will work with automotive brands to develop and mass-produce high-purity polycarbonate in the market, which means that Covestro will start supplying transparent polycarbonate containing chemically recycled raw materials to the automotive market.
Wang Li, global president of Covestro's engineering plastics division, told Yicai that more and more industries require products to contain a certain proportion of recycled raw materials, which has become a prerequisite for automotive companies to enter markets such as the European Union. In terms of economy, this kind of product containing recycled raw materials can not only help Chinese companies cross the threshold of going overseas, but also provide a green premium. At present, the demand for recyclable and recycled materials is growing faster than traditional materials. Such market demand has also pushed them to continue to increase investment in the Chinese market.
According to the data, Covestro's sales in the Chinese market in 2023 will be about 3.1 billion euros. By the end of 2023, Covestro had invested more than EUR 4 billion in China, with 10 production sites in Greater China, one innovation center in the Asia-Pacific region, and a comprehensive regional headquarters in Shanghai. In addition, Shanghai is home to the company's largest production site in the world, Covestro's Verbund Shanghai site.
Unlike LyondellBasel, which is a joint venture with Chinese enterprises to build a recycling plant, the French Veolia Environmental Protection Group has launched a joint venture between Chinese and foreign enterprises through the acquisition of shares in Zhejiang enterprise Huafei Renewable Resources Co., Ltd., trying to build a plastic resource recycling center in China and even Asia with Huafei as a platform. At this year's PLAS, Veolia, a key member of Veolia's global network of nearly 40 dedicated plastics recycling, showcased its innovative technologies and recycled plastic products, which currently recycle 170,000 tons of plastic annually with its subsidiaries. In 2023, Veolia Huafei and Zhejiang Blueview Technology jointly launched the "Blue Cycle" marine plastic project, which has processed about 6 million ocean plastic bottles so far.
For LyondellBasel, the driving force for deepening its presence in China is the rapid development of global electric vehicles and other industries dominated by China. Van Bolon, vice president of LyondellBasel's high-tech materials business in Asia Pacific, Africa and the Middle East, said that with the rapid development of the electric vehicle, electronics and packaging industries, the Chinese market brings growing opportunities for their high-tech materials business. The recycling plant jointly built with Junnuo Environmental Protection can produce 20,000 tons of recycled plastics per year, and the materials are used in multiple terminal scenarios such as automobile shells, luggage, and medical treatment. In addition, LyondellBasel also announced further cooperation with partners in the industrial chain such as Oriental Yuhong, Hunan Huda Ascential (AISN) and Zhengxin during the exhibition.
Private enterprises break their dependence on imports
In the localization cooperation and independent research and development with foreign-funded enterprises, more and more Chinese enterprises have begun to break the previous import dependence in the subdivided fields and become participants and even the main force to fill the technological gap.
"Domestic POE materials (polyolefin elastomers) were originally highly dependent on imports, and we have broken through the so-called stuck neck technology and are in the process of localized substitution. Deng Rong, director and CEO of Chambroad Holding Group, told Yicai. In April 2024, Chambroad's subsidiary, Shandong Jingbo Polyolefin New Materials Co., Ltd., successfully completed the delivery of the first batch of 300kg of chemically recycled polypropylene, realizing the chemical cycle from waste plastics to pyrolysis oil to recycled new plastics, and opening up the circular industrial chain of plastic chemical recycling.
After years of technical research, Wanhua Chemical, which invested 4 billion yuan in R&D last year, also launched POE-related products at this exhibition. As a high-end polyolefin material, POE has high technical barriers, and can be widely used in photovoltaic, modification, medical, packaging and many other fields because of its unique performance advantages.
He Yong, general manager of Wanhua Chemical New Materials Division, proposed that the company will have 200,000 tons of POE materials put into production this year and 400,000 tons next year. The 600,000 tons in the past two years is still a conservative estimate. In his opinion, the shortage of POE materials in the past few years has led to the inability of mainland battery technology to develop freely, and it has to compromise and adopt some other materials. Once the domestic POE material can be mass-produced, it will not only help the photovoltaic industry reduce costs, but also provide more support for innovation such as cell technology.
Based on the cooperation of the photovoltaic industry chain, in January this year, Wanhua Chemical established a joint venture with Foster and Trina Solar with POE particle manufacturing and sales as the main body, and built a new ecology of POE film through collaborative innovation, R&D and production. In the automotive sector, lightweighting has become an industry trend. At present, one of the important ways to reduce the weight of automobile body is to use lightweight and efficient composite parts. With the continuous improvement of the penetration rate of new energy vehicles and the continuous growth of demand in the automobile manufacturing industry, the demand for POE is expected to grow further.
For Huafon Group, which is mainly engaged in new polymer materials, one of the ways to break the technology monopoly and achieve globalization is through international mergers and acquisitions - in June 2022, Huafon Group's acquisition of the bio-based products related business and technology spun off by DuPont in the United States was officially completed. This was the largest overseas M&A transaction of Huafon Group at that time.
"Our pace of globalization has been resolute. You Feifeng, vice president of Huafon Group, told Yicai that DuPont's bio-based materials and technologies are unique in the world, and they have also established a research and development center in the United States. They are working with many downstream customers to promote innovation and product development and replace bio-based materials. "The demand of downstream customers for bio-based mainly comes from the international market, especially in Europe, and the process of technology marketing and R&D is also the process of internationalization, which is to do a more accurate R&D work in a market-oriented manner."
During the exhibition, Huafon Group will sign a sustainable development strategy with Li Ning, TUV Rheinland, SGS and other enterprises to increase collaborative innovation in the ecosystem.
(This article is from Yicai)
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