On June 17th, Aoshengde announced that it has decided to start the orderly closure of its hexamethylenediamine production plant located in Lianyungang City, China. This decision was made after a comprehensive assessment of the long-term feasibility of the factory in the constantly changing market dynamics and regulatory environment.
It was decided to close the factory right after its opening
It is understood that the integrated production base of hexamethylenediamine and nylon chemicals of Aoshengde in Lianyungang just opened in October last year. This base is the largest investment made by Aoshengde outside the United States and also its largest investment to date. The total investment of the project is approximately 4.2 billion yuan, covering an area of about 684 mu. The first phase of the project, with an investment of about 1.29 billion yuan, started construction in 2022 and was fully accepted in September 2024. It mainly involves the construction of a 200,000-ton annual hexamethylenediamine base. After full production, it is expected to achieve an annual sales revenue of approximately 2.86 billion yuan and a tax revenue of approximately 400 million yuan.
Throughout the entire business shutdown process, Ascend will always adhere to its commitment to safe operation, environmental responsibility and compliance. Ascend said that other businesses in China, including the Suzhou production base, will continue to operate as usual. The company will closely cooperate with local government agencies to ensure that the shutdown activities comply with all applicable environmental and safety standards. The company expects to complete the business shutdown work in the coming months.
The reconstruction of the global layout of multinational giants
It is worth noting that on the same day that Ascend announced its decision to close its factory, it simultaneously received an injection of 250 million US dollars. This kind of "cutting off one's own wrist to save oneself" operation actually reflects a cruel industry trend: multinational chemical giants are comprehensively reshaping their global layout strategies, and the production capacity in regions with lagging technological iterations has become the first target to be optimized.
The competition in the global nylon industry chain is extremely fierce
With the closure of Aoshengde's Lianyungang factory, the major reshuffle of the global nylon industry chain has officially begun. On the demand side, the vigorous development of emerging industries such as new energy vehicles, electronic products, and robots has driven the growth in demand for new nylon materials. However, changes in the supply pattern have led to a readjusting of the demand distribution.
The market pattern of nylon in the Asia-Pacific region has changed
As a major consumer region of nylon 66 globally, the Asia-Pacific region originally had a certain degree of reliance on the supply from the Lianyungang factory of Aoshengde. After the factory was closed, the supply gap within the region urgently needs to be filled. This has prompted domestic enterprises to rise at an accelerated pace. Many domestic enterprises are leveraging the cost advantages brought about by technological breakthroughs to intensify their capacity expansion efforts. For instance, China Pingmei Group has put into operation its 100,000-ton Asan plant, and the construction of the second 200,000-ton plant has also been initiated. This new process significantly reduces the cost compared to the traditional adiponitrile method, giving the enterprise a favorable position in global competition.
The future breakthrough battle of the nylon industry chain
From the perspective of the industry competition landscape, the strategic adjustments of leading enterprises have far-reaching impacts. The capacity contraction of Ascend has provided other enterprises with an opportunity to seize market share. Basf has put into operation its world-class hethylenediamine plant in Chapelle, France, increasing its annual production capacity to 260,000 tons. It has also further integrated key raw materials in the nylon 66 value chain through acquisitions. Although Invista has not expanded production on a large scale like BASF, it is also actively making plans to consolidate its position. With the support of technological breakthroughs, a large number of planned production capacity of Chinese enterprises will be released in a concentrated manner in the coming years. It is expected that by a certain period of time, the proportion of China's total production capacity of hethylenediamine in the global total will further increase, which is expected to reshape the global production and supply landscape of nylon 66.
In this global transformation of the nylon industry chain, the closure of the Lianyungang factory by Aoshengde is just the beginning. In the future, with the continuous innovation of technology, the dynamic changes in market demand and the adjustment of policies in various countries, all links of the nylon industry chain will face more profound reshaping. Whether it is upstream raw material suppliers, midstream producers or downstream application enterprises, all need to actively adapt to this change.
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