Chuanjinuo, as one of the major phosphate ore importers in China, has an annual import volume of over 500,000 tons of phosphate ore from overseas at its Fangchenggang base in Guangxi. Egypt is a key source of raw materials for it. Egypt has proven phosphate ore reserves of nearly 3 billion tons, ranking third in the world. The construction project of Chuanjinuo in Egypt, which was selected by the company, can effectively reduce the intermediate costs in the raw material import process and optimize the company's cost structure. The reduction of costs is expected to bring new cost control space to coating enterprises in the current situation where the prices of coating raw materials fluctuate sharply and the supplies of epichlorohydrin and titanium dioxide are in shortage.

According to the first-quarter financial report of Chuanjinuo Chemical, the company's revenue reached 721 million yuan (approximately 99 million US dollars), representing a year-on-year growth of 24%. The net profit soared nearly fourfold to 72 million yuan. The company attributed this growth to flexible production adjustments, focusing on high-profit products and improved cost control.

Phosphorus-based chemical products play a significant role in the production of coatings. For instance, phosphoric acid, as an important chemical raw material, can be utilized to produce certain additives for coatings with special properties, enhancing the corrosion resistance, adhesion and other performance of the coatings. The reduction in cost means that coating enterprises, when purchasing related raw materials, may obtain more cost-effective products, thereby alleviating to some extent the cost pressure caused by the rising prices of other raw materials.

Logistics advantages broaden the supply channels

Egypt, as a globally significant shipping and logistics center, enjoys inherent advantages in optimizing the maritime transportation costs for product exports. Currently, about 50% of the products of Chuanjinuo are exported. Phosphoric acid, calcium salts and fertilizer products are sold far and wide to Southeast Asia, South Asia, the Middle East and South America. After the completion of the project, relying on Egypt's logistics advantages, the phosphorus chemical products produced by it can be transported to all over the world more efficiently and at a lower cost. This provides a more stable and extensive raw material supply channel for coating enterprises.

In the coatings industry, the stability of raw material supply is of vital importance. When raw materials such as epichlorohydrin and TDI encounter supply crises due to factors like the suspension of production at overseas factories, a reliable supply channel for phosphorus-based chemical products can ensure that coating enterprises will not be forced to reduce or halt production due to raw material shortages when manufacturing phosphorus-related coating products, thereby guaranteeing the smooth progress of production plans.

Technical strength guarantees product quality

Chuanjinuo currently has a production capacity of over 1 million tons of high-quality phosphoric acid and phosphate salts. It holds dozens of authorized patents in the field of phosphorus and sulfur chemical engineering, masters the entire chain technology of wet-process phosphorus chemical engineering, and possesses its own independent-developed purification phosphoric acid technology. Its cost control ability ranks globally first. This time, Chuanjinuo is building a phosphorus chemical engineering project in Egypt. With its strong technical strength, it is expected to produce higher-quality phosphorus chemical engineering products. In 2024, Chuanjinuo achieved an income of 3.207 billion yuan and a net profit attributable to the parent company of 176 million yuan.

In the production of coatings, high-quality phosphorus chemical raw materials can significantly enhance the performance of coating products. For instance, high-quality phosphoric acid is used to produce coating additives, which can make coatings exhibit better performance in terms of weather resistance and glossiness, etc. For coating enterprises, stable and high-quality raw material supply is conducive to improving product quality, enhancing market competitiveness, and standing out in the current highly competitive and highly homogeneous coating market.

The phosphorus chemical project layout of Chuanjinuo in Egypt this time has a profound impact on the coatings industry. In the short term, as the project progresses gradually, it is expected to alleviate the tight supply situation of some raw materials related to phosphorus chemical coatings and stabilize the price trend. From a long-term perspective, this will prompt the optimization of the supply chain of the coatings industry and drive the industry towards high-quality and low-cost development.

With the increasing global demand for environmentally friendly coatings, the application prospects of phosphorus chemical products in environmentally friendly coatings are broad. The implementation of the Chuanjinuo project may lead to more enterprises increasing their investment in the research and production of raw materials for environmentally friendly coatings, promoting the rapid transformation and upgrading of the coatings industry towards a green and environmentally friendly direction, and injecting new vitality into the sustainable development of the coatings industry.(This article is from the website of Seetao.com. Without permission, it is not allowed to reprint. Otherwise, legal responsibility will be pursued. Please indicate Seetao.com and the original link when reprinting.) Editor of the Strategy Column of Seetao.com / Sun Fengjuan