Yantai, Shandong – Wanhua experienced a 4.7% year-on-year drop in net profit to CNY 10.6bn ($1.6bn). This is the same as its estimate in March. Revenue rose 14% from the 2017 level to CNY 60.6bn. The details are contained in its 2018 annual report, which was released in April.
The company’s polyurethane unit, mainly including MDI, TDI and polyols, contributed to more than half of the total revenue. The unit had 50% gross profit margin last year, down from 55% in 2017. This is a result of falling product prices, but it is still higher than that of Wanhua’s petrochemical and new materials units.
China’s MDI demand reached 2 MT in 2018 and overall global demand was 7MT, according to the company. Wanhua’s global market share exceeded 20%, the annual report said.
With a 1,000-member-strong research team, the company said it made a breakthrough in the sixth-generation photochemical reaction technology for MDI in 2018. In total, research expenditure in 2018 jumped by 30% from 2017, to CNY 1.6bn.
In 2018, the domestic market accounted for two-thirds of Wanhua’s total revenue. China is its most profitable region. It generated a 41% gross profit margin, roughly twice that in the overseas markets.
Wanhua pegs its 2019 revenue at CNY 7.3bn.
Its planned 400kT/year MDI project in Convent, Louisiana has obtained further approval by Chinese authorities, according to a Wanhua announcement on April 24, and the company is looking to raise $875m to fund the $1.25bn plant.
Its 300kT/year TDI facility in Yantai is to suspend production on May 6 for regular maintenance, and will resume operation after 30 days, another Wanhua announcement said.