CHENGDU, CHINA (May 11, 2 p.m. ET) — Polyphenylene sulfide resin maker China Lumena New Materials Corp. and DSM Engineering Plastics have agreed to discuss joint marketing of several grades of engineering plastics and jointly develop alloys of PPS and polyamide 4/6.
The companies announced May 3 they have agreed in writing to “further explore potential cooperation” in marketing and selling DSM's Stanyl polyamide material in China and Lumena's Haton-brand PPS outside China, as well as look at expanding it to other areas.
“We believe that the cooperation will help to increase our presence in overseas market[s], attract larger consumer groups and expand our source of revenue,” said Zhang Zhigang, Lumena chairman and executive director, in a statement.
Lumena, based in Chengdu, said it is the world's largest maker of PPS resin measured by production capacity. The company said PPS is one of the materials singled out for development and support in China's 12th five-year plan, which ends in 2015.
DSM is based in Herleen, Netherlands.
Lumena, which is traded on the Hong Kong Stock Exchange, said it is expanding its PPS resin and fiber production, with expected annual production capacity of 121.2 million pounds of resin and 44 million pounds of fiber by the end of the year. It said it plans to add another 55.1 million pounds of resin capacity by the second half of 2013.
In an April 2 earnings statement, the firm said sales rose 133 percent in 2011 to 4.57 billion yuan (US$720 million), mainly because it completed the acquisition of Sino Polymer New Materials Co. Ltd. and included those results in its 2011 financials. It said that acquisition gave it the largest capacity of PPS production in the world.
Profit for 2011 was 1.25 billion yuan (US$197 million), up 72 percent from 2010.
Lumena said China's PPS market is projected to grow 20 percent a year, from 88.2 million pounds in 2010 to 229 million pounds in 2015.
It said China still has to import about half of its PPS demand, mainly from the U.S. and Japan, but the Japanese earthquake in March 2011 created opportunities for Chinese PPS producers to expand their market share.
Lumena said it's also one of the world's largest makers of thenardite, a crystalline mineral used in medicines and other applications.