According to the overall relocation plan of the chemical industry area of Dongfeng Lake New District in Yueyang City and the progress plan of Baling Petrochemical’s caprolactam industry chain relocation, upgrading and transformation development project, the production plant of Kemet Gas Headquarters is facing relocation.
On the evening of November 26, Kemet Gas issued an announcement stating that the company’s headquarters had started to implement the suspension and relocation of its production plant starting from that day, in accordance with the notice from the upstream Sinopec Hunan Petrochemical Co., Ltd.
After the production plant of Kemet Gas Headquarters ceases production, it will be relocated to Hunan Yueyang Green Chemical High-tech Industrial Development Zone (hereinafter referred to as “Yueyang Green Chemical High-tech Zone”). The total land area for the first phase of the project is 79 acres.
Yueyang Green Chemical High-tech Zone is a provincial economic and technological development zone approved by the Hunan Provincial People’s Government in 2003. It is included in the trillion-dollar petrochemical industry cluster that is the key development and cultivation of Hunan Province. Kemet Gas supports the gas resources required by Yueyang Green Chemical High-tech Zone, designs and implements new project planning plans.
In the new factory area, the supporting caprolactam industry chain device exhaust gas recovery and comprehensive utilization project may be a new highlight of Kemet Gas, which will be managed by the established wholly-owned subsidiary Yueyang Kemet Environmental Protection Co., Ltd. (hereinafter referred to as “Kemet Environmental Protection Company”) Implement the exhaust gas recovery and comprehensive utilization project of the supporting caprolactam industrial chain device (hereinafter referred to as the “Kemet Environmental Protection Company Project”).
Kemet Gas said that Yueyang Green Chemical High-tech Zone has obvious regional and resource advantages. The company will make full use of its resource concentration advantages to produce high-purity carbon dioxide and rare gases to support the development of the national industrial economy. The Kemet Environmental Protection Company project uses the exhaust gas from the caprolactam industry chain relocation and upgrading transformation development project as the main raw material to produce high-purity carbon dioxide; it uses the lean krypton xenon liquid oxygen and crude neon helium nitrogen from the caprolactam industry chain relocation and upgrading transformation development project to supply Yueyang Kemet Electronic Special Rare Gas Co., Ltd. produces krypton-xenon mixed gas, neon, helium and other electronic special gas products, which is in line with the company’s development strategy and industrial layout.
As of the date of the announcement, the main body of the civil construction of Kemet Environmental Protection Company’s project has been completed, and the equipment installation has been basically completed. At present, the installation and construction of pipelines, electrical, instrumentation and start-up preparations are being carried out in an intense and orderly manner.
As the leader in the carbon dioxide gas industry, Kemet Gas has accelerated its expansion in the electronic special gas product market in recent years. However, affected by market factors such as the price of rare gases gradually falling from the previous high in 2023, the company’s electronic special gas revenue dropped significantly year-on-year. In the first three quarters of this year, Kemet Gas achieved operating income of 418 million yuan, down 23.2% year-on-year; net profit loss was 15.2789 million yuan, down 113.23% year-on-year, and turned from profit to loss.
When mentioning the company’s business plans and priorities recently, Kemet Gas stated that the company will seize the development opportunities of “carbon peaking and carbon neutrality” to consolidate and consolidate the leading position of “KMT” brand products in the carbon dioxide gas industry. On the basis of this, we will accelerate the construction progress of new projects, accelerate the market expansion and sales of electronic special gas products, actively enter into international and domestic high-end customers, and continuously improve our core competitiveness in the field of professional electronic special gases.
Before the production of this headquarters was suspended, Kemeiteqi had made relevant arrangements. The company recently mentioned in its announcement that the procurement of main raw materials is concentrated in large upstream petrochemical companies, and there is a certain economic symbiosis with the upstream petrochemical industry. Both upstream petrochemical and petroleum companies are internationally renowned large petrochemical and oil companies. . These enterprises have stable production and operations and can provide the company with sufficient and stable sources of raw materials. However, according to the requirements of safe production, petrochemical enterprises need to arrange a certain time every year for shutdown maintenance, technical transformation or equipment updating, etc. The company reasonably arranges the maintenance time of the company’s machinery and equipment based on the shutdown and maintenance time of the upstream enterprise to ensure that the company can produce safely and normally during the non-stop time of the upstream enterprise. In order to prevent the impact of the shutdown of upstream chemical manufacturers on the company’s production and operations, the company has established production bases in Yueyang, Hunan, Anqing, Anhui, Huizhou, Guangdong, Quanzhou, Fujian, and Yangpu, Hainan; the company has also established a professional fleet for product transportation. Through the construction of the above-mentioned multiple bases and the improvement of transportation capacity, the company can realize the timely deployment of products from different bases, effectively reducing the adverse impact of a single upstream chemical enterprise’s shutdown and maintenance on the company’s normal production and operations.
Regarding the impact of this production suspension, the company stated in an announcement on the evening of the 26th.
Before the production plant of Kemet Gas Headquarters was suspended and relocated, the headquarter had appropriately increased production intensity, reasonably arranged production plans, and produced and stocked goods in advance according to customer needs. During the suspension of production, the company will make reasonable arrangements for product dispatch with its subsidiaries to ensure stable supply to customer needs. The relocation of the headquarters production plant will have a certain impact on the company’s operating performance in the short term and will incur corresponding costs and expenses. The specific accounting treatment and related financial data shall be subject to the audit results of the accounting firm.
Kemet Gas believes that the suspension of production and relocation of the headquarters production plant to implement the Kemet Environmental Protection Company project can enhance the mutual compatibility between the company’s products and form a series of product industry chains. The company will take this relocation as an opportunity to optimize production equipment and products. Structure, realize the upgrading and adjustment of product structure, thereby forming economies of scale advantages, increasing the ability to resist market risks, and meeting the needs of the company’s long-term development interests.
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