On February 2, Global New Materials International (6616.HK) held the unveiling ceremony of the second phase of the new intelligent factory and production launch ceremony, symbolizing that the company's advanced production capacity has entered a new stage.
The Phase II smart factory is an important deployment for upgrading the international production capacity of global new materials. According to the annual production capacity plan of 30,000 tons of pearlescent materials, it mainly produces high-end automotive weather-resistant, cosmetic grade, and special functional pearlescent materials. It is currently the largest and most advanced smart pearlescent material factory in the world.
What are the highlights of Global New Materials International's Phase II smart factory? With the commissioning of the new smart factory, what benefits will it have on the international performance and future development of Global New Materials?
Capacity expansion and structural optimization to accelerate entry into a new stage of high-quality growth
The commissioning of a new plant has many benefits for the international development of global new materials. First, there is a significant expansion of overall production capacity. The current production line of the company's first phase production plant is operating at almost full capacity, and the capacity utilization rate is close to 100%. Breaking through production capacity bottlenecks has become the company's top priority in expanding the market size.
The design capacity of the new Phase II smart plant is 30,000 tons of pearlescent pigments per year. With the unveiling of the company's Phase II smart new factory and the start of production, the overall production capacity will double at that time. In the context of the rapid growth of the pearlescent pigment market industry, it is expected that all of the new production capacity will be converted into revenue. Global New Materials International has accumulated a small amount of revenue. When production capacity is released in a new round, Global New Materials International's performance is expected to increase significantly.
On the other hand, with technological progress and the continuous upgrading of market demand, the high-end market will become a new battleground for enterprises to compete. Automotive-grade and cosmetic pearlescent pigments have a high technical threshold, high added value, and large market space. Global New Materials International has mastered the world's leading key production core technologies such as synthetic mica and pearlescent materials. The new intelligent factory mainly produces high-end automotive weather-resistant, cosmetic grade, and special functional pearlescent materials, which means that Global New Materials International's high-end production capacity will be rapidly expanded, the product structure will be further optimized, and high-end market opportunities will be seized.
According to the Global New Materials International Financial Report, the company's pearlescent pigment products account for more than 90% of revenue in 2022, of which synthetic mica-based accounts for more than 40%. Thanks to the relatively high revenue share of high-end products such as synthetic mica, the company's gross margin reached 49.70% in 2022, which is at the leading level in the industry. With the completion of the second phase of the plant, advanced production capacity will accelerate its entry into Global New Materials International's current product line, help the company's product high-end process, significantly enhance the company's performance, bring higher gross profit and profit, and help the company enter a stage of high-quality growth.
High-end intelligent manufacturing highlights strength and provides strong quality assurance and technical support for products
In order to cope with the increasingly competitive global market, China's economy has gradually moved from rapid growth to a stage of high-quality development in recent years. The transformation from “Made in China” to “Made in China” is increasingly becoming a major trend in the future development of the manufacturing industry. This transformation means that more intelligent, efficient, and green production methods are needed to achieve industrial upgrading and leapfrog development.
Industry 4.0 is an intelligent era. Global New Materials International also adheres to the concept of intelligent and green manufacturing, turning the Phase II new plant into a “green, intelligent, and environmentally friendly” global industry benchmark factory, demonstrating the strength of Global New Materials International's intelligent manufacturing, while providing strong quality assurance and technical support for products.
The second phase of the plant project uses next-generation automated and intelligent pearlescent material production equipment. It has an intelligent mica processing production line, a cosmetic product production workshop, an intelligent production integrated control and management system, an intelligent storage and material transmission system, and intelligent control of the production process. At the same time, data visualization and management are more convenient and standardized, and can optimize business collaboration between various departments such as production, sales, and management, increase production and reduce losses, thereby achieving enterprise lean, standardized, and cost reduction and efficiency.
The company will also integrate the concept of high-quality green sustainable development into future development strategies to promote energy saving and emission reduction, recycling, and green development. The Phase II smart factory complies with national “green factory” standards. It makes production materials harmless, production is clean, waste is recycled, and energy is low in carbon, ensuring that products are green, healthy and environmentally friendly, and effectively reducing unit electricity consumption and unit labor costs.
High-end market demand for pearlescent pigments is strong, and Global New Materials International seizes domestic and foreign market opportunities
The pearlescent pigment industry is in high demand and is in a stage of rapid growth. Among them, the high-end pearlescent pigment market is growing faster and has great potential. According to the Frost & Sullivan report, the global pearlescent pigment market is expected to reach RMB 44.6 billion by 2025, with a compound annual growth rate of 23.9% from 2021 to 2025. Among them, the global automotive pearlescent pigment and cosmetic pearlescent pigment markets are expected to reach RMB 4.5 billion and RMB 8.7 billion in 2025, with compound annual growth rates of 47.1% and 32.8%, respectively.
Global New Materials International is a leading enterprise in the domestic pearlescent pigment industry. In order to seize the opportunities in the pearlescent pigment industry, maintain competitiveness, and bring greater growth opportunities to the company, the company formulated a development strategy with equal emphasis on “endogenous development and epitaxial expansion” at the time of listing. Among them, endogenous development focuses on capacity improvement, technological innovation, and product iteration to meet market demand; epitaxial expansion accelerates the company's development and global progress through mergers and acquisitions.
If the commissioning of the Phase II plant is a major step forward in the international endogenous development of Global New Materials, enabling the company to comprehensively improve the level of innovation, R&D, production, and market on the current basis; then successfully taking CQV, a well-known Korean company, is a landmark step in the international epitaxial expansion of Global New Materials. Multinational mergers and acquisitions and increased production capacity resonate on the same frequency and complement each other to help Global New Materials International achieve better development.
In terms of intelligence, Global New Materials International's introduction of the CQV smart factory technology has raised the level of intelligence in the Phase II factory; in terms of technology, CQV has a strong R&D team, focusing on high-end products such as automotive grade and cosmetic grade, and its technical advantages empower Global New Materials International and improve the product quality of the new factory; in terms of sales, the two combine production and sales, and are also an effective way to “go global”. CQV has sales channels in more than 100 countries and regions around the world, which can better absorb the real estate energy of the Phase II factory; in terms of supply chain, CQV accounts for more than 75% of sales of automobiles For grade and cosmetic grade products, taking advantage of domestic cost advantages, phase II production capacity can reduce the manufacturing cost of high-end CQV products and increase profitability.
Endogenous dynamics and exogenous expansion go hand in hand. Global New Materials International also achieved many technological breakthroughs in 2023. At the recent press conference, it launched five new products: automotive-grade pearlescent pigments, pearlescent pigments for solar panels, high-end flaky alumina, titanium-free pearlescent pigments, and iron-based matte chameleon series pearlescent pigments, which fully demonstrated the company's high level of production technology and luxurious pearlescent pigment product lineup. Its pearlescent pigment products “shine brightly” and are at the forefront of the industry to seize market opportunities.
Despite the turbulent external environment, under the strategic guidance of “endogenous development and epitaxial expansion,” Global New Materials International has completed major initiatives such as the completion and commissioning of the second phase of the smart factory, improvement of R&D capabilities, and deep integration with CQV. The pace of development and achievements are obvious to all, and these developments will have a huge interactive effect and work together to enhance the company's comprehensive strength, further opening up room for growth. It is expected that future performance will continue to increase rapidly.