Shanghai, China – Liming Institute, a maker of polyurethane systems, elastomers and adhesives for flexible foam, reported 10% utilisation rate in 2017 for systems out of the unit’s 100kT/year full capacity.
PU China 2018: Systems house Liming hits 10% capacity utilisation in 2017
The unit experienced flat revenue of CNY 200m ($29m) last year compared to 2016, with marginal profits, said Zhao Xiuwen. He is manager and engineer of the institute’s systems arm.
Zhao pegs the inland location of the company as a major reason for its stagnant development. It is located in northern China’s Luoyang, Henan province.
‘We specialise in differentiated systems but are unable to keep close track of new trends as in areas such as the Yangtze Delta, where there are sophisticated industry clusters,’ said Zhao. ‘Sometimes we won’t become aware of a new trend until a few years later.’
Rising raw materials prices and environmental compliance costs also eat into the profits, Zhao added. Last year, thousands of systems houses closed down across the country. This is a result of tightened environmental regulations in China.