Lately, Longxing Chemical Stock Co., Ltd. agreed with Xinjiang Jinyuxin New Materials Co., Ltd. for establishing a joint venture with joint contribution of RMB 100 Million Yuan to enter the project, technology and equipment fields for resource utilization of solid wastes (construction waste, household refuse, medical hazardous waste, electronic waste, waste tire, etc).
In recent years, as excess capacity and intensifying competition occurred in carbon black industry, the gross profit rate of Longxing Chemical has declined year by year. Although the supply, production and sale in 2015 kept balance and steady, Longxing Chemical still could not save the significant losses in main business for the cost dropped away from the selling price.
Board of Directors of Longxing Chemical believed that as carbon black industry would still maintain the present status in a short time and the enterprise operating environment could not be improved rapidly, the choice to seek other profits for supporting beyond main works was in line with the interest of shareholders.
Longxing Chemical said that the assets placed by the joint venture were a complete sets of equipment manufacturing technology with domestic leading level in the aspect of construction waste resource utilization. This technology would have a wide application market and bring good economic benefits as the increasing demand on environmental protection for urban development. In addition, by joint operating management of both parties on the joint venture, it is expected that it would receive a better return on investment.
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