CHENGU, CHINA (Sept. 4, 12:40 p.m. ET) — Polyphenylene sulfide resin maker China Lumena New Materials Corp. said rising demand for engineering materials in China pushed up sales 14.5 percent in the first half of the year, and it projected applications like smokestack filters aimed at cutting pollution from Chinese power plants will bring more growth.
The company, the world's largest PPS maker by production capacity, said it anticipates completing an expansion that will give it 121.2 million pounds of PPS resin capacity, roughly double current levels, and 44 million pounds of PPS fiber capacity, by early next year.
While the group said the slowing Chinese economy hurt other businesses it has in mining and crystalline materials, sales of PPS resin seemed less effected, rising 14.5 percent to 1.42 billion Chinese yuan (US$223.6 million).
Segment profits for PPS materials rose 15.5 percent to 687.7 million yuan (US$108.3 million), it told the Hong Kong stock market in an Aug. 30 filing.
The Chengdu, Sichuan province-based company said PPS is one of the materials singled out for development and support in China's 12th five-year plan. It said consulting firms estimate demand for PPS will grow 20 percent a year in China for the next five years.
Lumena said its plans for the PPS market got a boost in April when a committee of the China Association of Environmental Industry endorsed PPS for use in filters to control smokestack emissions in coal-fired power plants, waste incarnation plants and cement plants.
China's government is imposing stricter emissions limits on power plants, Lumena said, reducing allowable particulate emissions from 50 mg per cubic meter to 30 mg/cubic meter for new plants. Existing plants have until 2014 to comply.
“PPS fiber is currently the most cost effective material for producing filter bags, and can be used as environmental filters and filter bags for cement plants, thermal power plants and waste incineration plants,” Lumena said.
It said filter bags currently have less than 10 percent market share in China's thermal power industry, and said demand for PPS fiber in the filters is expected to be 44 million pounds a year.
“It is expected that, against the macro background of increasingly stringent emission standards and strengthened enforcement measures, the implementation of relevant policies will benefit the sales of PPS,” the company said.
As previously reported, the company also signed an agreement earlier this year with Dutch firm DSM Engineering Plastics to discuss joint marketing of several grades of engineering plastics and jointly develop alloys of PPS and polyamide 4/6.
Lumena also said it wants to expand its PPS markets into automotive, sanitary wares and fireproof materials. It said it expects an additional capacity expansion for PPS resin to 176 million pounds in late 2013.