Perspective of China Nylon Industry · China Nylon Industry Rainbow Hotel, Shanghai 6 Dec 2012 Perspective of China Nylon Industry — China textile industry is attaching more importance

Perspective of China Nylon Industry

Deng Jun

Secretary General

China Chemical Fiber Association (CCFA) Polyamide Commission

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10th China International Polyamide & Intermediates Forum


Rainbow Hotel, Shanghai6 Dec 2012


— China textile industry is attaching more importance to product design and innovation, while the mode of textile and apparel export is transferring from OEM to ODM and OBM, adding more values to home-owned brands of yarn, fabric and accessories in world market.

。。。。

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Sufficient Feedstock Supply is the

To Enhance Nylon's

Innovation Union Provides


Sufficient Feedstock Supply is the Base

16.588

110

74.253

148.5

C&S America USA W Europe E Europe Japan Asian Other

Global caprolactam capacity totaled 4,902kt in 2011

New capacities mainly emerged in Asia, particularly in Mainland China and Chinese Taiwan, while other regions witnessed slow or even negative growth.

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Company Old capa. New capa. Startup TimeSINOPEC Baling Petrochemical

Company200 100 Oct 2012

DSM Nanjing Chemical 200 200 Nov 2013

SINOPEC Shijiazhuang Refining & Chemical

165 0

Juhua Group Corporation Polyamide Factory

25 25 Apr 2012

Zhejiang Baling Hengyi CPL Co., Ltd. 0 200 May 2012

Shandong Haili Chemical Industry Co., Ltd.

0 20 Mar 2012

Shandong Hongye (Shandong Fangming) 0 10 Sep 2012

Total 590590 825825


CPL Capacities in China in 2012 (kt/yr)

Company Capacity(kt/a) Startup Time LocationSinopec 400 2013 Maoming (Fujian)

Shandong Haili 200 2013 Dafeng (Jiangsu)

Shandong Hongye(Shandong Fangming) 100 2013 Heze (Shandong)

China Tianchen 200 2013 Fuqing (Fujiang)

Lanhua Sci-Tech 200 2013 Jincheng (Shanxi)

Luxi Chemical 200 2013 Liaocheng (Shandong)

Sanning Chemical 200 2013 Zhijiang (Hubei)

Qinghua Group 200 2013 Wuhai (Inner-Mongolia)

Cangzhou Chemical 120 2014 Cangzhou (Hebei)

Xvyang Group 200 2014 Cangzhou (Hebei)

Sanding Group 200 2014 Yiwu (Zhejiang)

Changle Highsun 400 Pending Changle (Fujian)

Jinjiang Technology 200 Pending Fuqing (Fujian)

Jianyuan Coal Coking 200 Pending Erdos

CP

L Projects S

cheduled to be Com

pleted by 2015


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Application World China

Engineering Plastics 37% 19%

Industrial Filament 16% 23%

Textile Filament 33% 51%

BOPA Film & Others 14% 7%


Comparison of Consumption Structure

Investment in Nylon Polymer Projects (kt/yr)

Company 2012 2013 2014 2015

Jiangsu Haiyang 60

Changle Liheng 100 180 250

Jiangsu Ruimeifu 25

DSM Jiangyin 50

Jiangsu Qiangli 200

Yueyang Yingshan 15

Shandong Anda 35

Xiaoshan Mesbon 35

Shandong Fangming

50

Fujiang Jinjiang 200

Yiwu Huading 70, 1st-phase

Zhuji Yongxin 70


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Company 2012 2013 2014 2015

Wujiang Indewin 100

Zhejiang Fangyuan 140

Hunan Jinbo 85

Zhejiang Nature 294

HaiAn Zhongshan 100

Shandong Xiangyu 200

HaiAn Jinrong 120

Investment in Nylon Polymer Projects (kt/yr)


Investment in Textile Filament Projects (kt/yr)


CompanyExpansion

(kt/yr)Startup Time Company

Expansion (kt/yr)

Startup Time

Changle Liheng40 Q1 2012 Zhejiang Xinlun 30 By end of 2012

40 2013 Yantai Huarun 23 By end of 2012

Quanzhou Tianyu 11 Q1 2012 Zhejiang Jiahua 50 2012-2013

Zhejiang Mesbon11 Q2 2012 Fujian Kaibang 55 2012-2013

11 By end of 2012Yinan Chemical

Fiber11 2012-2013

Wujiang Yatai 23 Q2 2012Hangzhou Jinsheng

30 2012-2013

Hangzhou Xinfu 10 Q3 2012 Hunan Jinbo 15 2012-2013

Indewin 50 Oct 2012Zhejiang Yongxin

35 2012-2013

JinjiangTechnology

60 By end of 2012 Zhuji Xinqin 16 2012-2013

Yiwu Huading 45 By end of 2012 Qianchao Nylon 45 2013

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Investment Completed(billion yuan)

Y-o-Y

Chemical fiber 64.346 21.51%

Cellulose feedstock & fibre

13.446 30.08%

Synthetic fiber 50.9 19.43%

Nylon fiber 6.356 60.50%

Polyester fiber 22.789 8.22%

Acrylic fiber 0.431 -28.39%

PVA fiber 0.770 -37.90%

Polypropylene fiber 0.1679

Spandex fiber 2.008


Investments for fixed assets during Jan-Sep 2012

Source: Statistic Bureau of China

Forecast on China Nylon Fiber Demand:

Nylon fiber demand increase by 12％, and 5％ for other fibers — According to the 12th Five-year Plan

Nylon engineering plastics demand grow by more than 10％— Industry meeting

Film and Others?


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To Enhance Nylon's



To Enhance Nylon's Edge

China chemical fiber industry has now entered Stage 3,

during which brands and company culture provide growing

values for enterprises.

Stage 1: SellerSeller ’’s Markets Market

Stage 2: LargeLarge --scale Productionscale Production

Stage 3: Brand ConstructionBrand Construction

Three Stages of China Chemical Fiber Industry:

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Textile Applications of Nylon Fiber

Hosiery, lace underwear, bodysuit, sports bra, wedding dress, jacket, gym suit, raincoat, wind-resistant jacket, quick-dry clothes, cold-protective jacket, outdoor tent, sleeping bag, camping bag...



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Fashion — A Feature of Nylon

Applications of nylon fiber indicate that nylon bears the factors of fashion products, as it provides mid-to-high-class consumer goods that reflect fashion.

Fiber — the core of textile & apparel innovation?


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Application — Hollow Fiber

Hollow fiber helps to retain warm air in the fabric, while prevent cold air outside from reaching the body. Out-door suits made of hollow fiber have high thermal performance, and the fibers light in their weight provide soft touching and comfort. They are also widely applied in sleeping bags.


Application — Microfiber

Fabrics made of nylon microfiber are extremely thin while lose no tear-resistant & abrasion-resistant properties. With space between fibers ranging between the diameter of water drop and water vapor droplet, they are water-proof without being coated, while also provides soft touching and good drapability. They are generally applied as wind coat and lightweight wind protective clothes.


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Application — Moisture-absorption Fiber

Channels on the surface of moisture-absorption fiber lead sweat from inner side of fabric to outside, thus keep inner side dry.


One sweat drop generally contains 99% moisture and 1% secretions and bacteria. After sports, fabrics are usually warm and wet. Ordinary moisture absorption fibers could also keep fabric dry, but the 1% which contains bacteria remains, and the bacteria on the surface of non-round-cross-section-fiber-based clothes would be more easy to produce smells.


People expect higher standard of life

Adding silver or other antibacterial substances into fibers would quickly kill staphylococcus aureus and other harmful bacteria.

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China outdoor product industry had witnessed fast development in the past decade. In 2000, the retail sales of theindustry totaled RMB 60 million, and the number reached 11 billion in 2011, with 615 compound growth rate.

According to the semiannual report of TOROAD： the company achieved sales income of RMB379.94 million with its main business scope during Jan-Jun 2012, up by 52.38％ y-o-y, and the operating profit was RMB 84.22 million, up by 63.67％ y-o-y, and the net profit was RMB59.23 million, up by 36.06％ y-o-y.

Among above data, the y-o-y growth of outdoor apparel, shoe and equipments was 56.6％, 41.76％ and 43.37％ respectively, accounting for 65.04％, 23.1％ and 11.16％ of main business total.


As for home textiles, fiber brands, spinning & weaving/knitting progress, printing/dyeing/finishing, design, fabric brands, sewing progress, accessory brands, brand endorser and brand images... all these can add value to products. However, nowadays in China, most of the added value come from the last two factors.

According to data collected from the web, the popularizing rate of down-and-feather-filled bedding products are: 100％ in Japan, 60％ in Europe and the US, and 10％ in China.


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It is a new trend to cooperate along the industry chain by combining quality with brand promotion.

Brand construction in fiber sector helps to improve product prestige along the chain, as well as enhance product’s comprehensive competitiveness.



To Enhance Nylon's



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Innovation Union Provides Value

Industry union is a method of enterprises to cooperate by utilizing their market, technology, talents and brand resources in an integrative mode, in order to face competitions and expand new market. Types of industry union generally include R&D union, standardization union, industry chain union and market union, etc.

Industry Union—— A most important innovation in late 20th century

• A successful union helps enterprises in it to accelerate their development, be less vulnerable to environment changes, and also promote the construction of industry innovation system, which provides more says for the industry in world market.

• In order to gain supports from the government, unions that focus on technology innovation should serve the strategic interests of the country, as well as help to promote technology innovation along the industry chain.


The role and significance of an union

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• Vague interest division is fatal to an industry union. It is necessary to decide how to divide the ownership of patent produced during R&D at the very beginning of the union, and adjust accordingly during union’s development, thus to maintain the sustainability of union’s works.


Problems facing industry unions

Nylon Industry Technology Innovation UnionNylon Industry Technology Innovation Union

The nylon committee of CCFA is in the progress of

constructing an industrial technology innovation union, to

concentrate edges of its member enterprises in basic

research, engineering technologies and industrial

operation, to enhance the overall capability of

independent innovation of the industry.

The nylon committee of CCFA is in the progress of

constructing an industrial technology innovation union, to

concentrate edges of its member enterprises in basic

research, engineering technologies and industrial

operation, to enhance the overall capability of

independent innovation of the industry.


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Thank you!Thank you!


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Perspective of China Nylon Industry · China Nylon Industry Rainbow Hotel, Shanghai 6 Dec 2012 Perspective of China Nylon Industry — China textile industry is attaching more importance