China's Sichuan Jinlu Group Co. Ltd. reported annual net loss of 174 million yuan ($30 million) in 2013, citing natural disasters and the fall of its former chairman as “worsening factors.”
Jinlu produced 261,322 metric tons of PVC resin last year, 7.5 percent less than the previous year. Operating revenue dropped 7.7 percent to 2 billion yuan ($321 million).
The Deyang, Sichuan-based company reported a profit of 16 million yuan ($2.6 million) in 2012.
Jinlu attributed the sizable loss in 2013 to “fierce competition” that caused “tremendous difficulty and pressure” to its operations. Due to a slowing economy and industry overcapacity, China's PVC resin market was plagued by weak demand and price slump in the past year.
It also blamed storms as well as mud and rock slides in July 2013 for “adding difficulty” to its production.
The company also noted the unusual change of leadership and ownership in the company as a “grim test and challenge” to its stability.
Jinlu's former chairman Liu Han, a 49-year-old multi-billionaire and high profile philanthropist, was detained by Chinese police in March 2012 for a series of suspected criminal charges including forming and leading mafia, homicide, and harboring criminals. The prosecution process started last month.
Publicly listed Jinlu said in its annual report that Liu stepped down in August.
Deyang's State-owned Assets Management Co. Ltd. (SAMC) now is Jinlu's second largest shareholder. It is lending Jinlu a one-year loan of no more than 100 million yuan ($16 million).
Its largest shareholder, Sichuan Hongda Group Co. Ltd., has agreed to have SAMC exercise its shareholder's rights on its behalf.
Jinlu's new chairman Zhang Changde is an official from Deyang government's state assets committee, which owns SAMC.