Total investment of 2.25 billion yuan; Bohai Chemical acrylic acid project achieves phased production

The acrylic acid unit put into operation this time is the core foundational unit of the entire new materials project. It provides core raw material support to the subsequent deep processing of acrylates and the production of super absorbent resins, efficiently filling the gap in the company's basic acrylic acid production capacity, perfecting the upstream layout of the fine chemical sector chain, and further enriching the company's portfolio of chemical new materials.

Overview of the 2.25 Billion Yuan Major Project: Multi-category Capacity Coverage and Full-chain Layout

According to previously disclosed information, the Acrylate and Super Absorbent Resin New Materials Project has a total investment of 2.25 billion yuan. It is a key new materials upgrade project to Bohai Chemical in recent years, featuring complete overall planning and diversified capacity layout, covering upstream and downstream acrylic acid items in all aspects. The specific construction content includes five core production capacities and a full set of supporting facilities:

160,000 tons/year basic acrylic acid unit;

· 30,000 tons/year methyl acrylate/ethyl acrylate unit, supporting flexible switching between the production of the two items;

· 160,000 tons/year butyl acrylate/isooctyl acrylate unit, capable of switching mass production based on market demand;

· 40,000 tons/year glacial acrylic acid dedicated unit;

· 50,000 tons/year super absorbent resin unit and supporting general utilities, ecological preservation, and storage facilities.

Upon full completion, the project will form a complete sector chain ranging from basic acrylic acid raw materials and differentiated acrylate items to high value-added super absorbent resins. This will help the company break free from the limitations of traditional chemical items and enter high-development downstream sectors such as coatings, adhesives, and hygiene materials.

Differentiated Project Construction Progress, Complete sector Chain Not Yet Formed

Currently, the overall construction of the project presents a phased characteristic of partial production and overall construction-in-progress. Only the 160,000 tons/year acrylic acid unit has completed feeding and commenced production, while the remaining acrylate deep processing units and core downstream supporting capacities are still under construction.

Specifically, the 50,000 tons/year super absorbent resin unit, a terminal high value-added product of the project, has not yet been completed or put into production. Consequently, the project has not yet formed a closed-loop production system of "acrylic acid raw materials—acrylates—super absorbent resins," and the synergistic advantages of the sector chain have not yet materialized. It will still take a certain cycle to the overall project to reach full capacity and emit full production benefits.

Multiple Uncertainties Coexist, Risk of Project Benefits Falling Short of Expectations

Regarding the commissioning of the unit and the subsequent operation of the project, Bohai Chemical has also objectively highlighted several operational risks. The company stated that the current market ecological stability to the chemical sector is complex and evaporative, and the subsequent operation of the project faces numerous uncertain factors.

On one hand, frequent fluctuations in raw material prices will immediately impact production costs and profit margins; on the other hand, capacity in the domestic acrylic acid, acrylate, and super absorbent resin sectors continues to expand, sector competition is becoming increasingly fierce, and there are uncertainties regarding product prices and market share.

Under the combined affect of multiple factors such as the incomplete landing of the sector chain, market evaporative environment, and intense sector competition, there are possible risks that the future capacity emit and profitability of this major fundraising project might fall short of expectations. The company will continue to advance the construction progress of the remaining units, steadily enhance the sector chain layout, actively respond to market changes, and ensure the stable operation of the project.