In the first quarter of 2018, the news of the acquisition of leading companies was endless:

Hengli acquires a 40% stake in Guxiandao Green Fiber Co., Ltd., a leader in the domestic polyester industrial wire industry; Hengyi intends to purchase 100% equity of Jiaxing Yipeng Chemical Fiber Co., Ltd. held by the controlling shareholder Hengyi Group and Taicang Yifeng by issuing shares. 100% equity of Chemical Fiber Co., Ltd. purchased 100% equity of Zhejiang Shuangtu New Material Co., Ltd. held by Fulida Group and Xinghui Chemical Fiber Co., Ltd., which was initially set at RMB 4.192 billion; Hangzhou Yiyi Chemical Fiber Co., Ltd. (shareholder: Zhejiang Hengyi Group Co., Ltd. The company acquired Zhejiang Jinyuan New Material Co., Ltd. with a transaction price of 325 million.

You think this is over, no, the bigger acquisition is still behind:

Far East New Century Joins Two Companies, Wins Largest PTA Plant in US

According to the Far East New Century official website news: local time on March 21, Far East New Century subsidiary Far East Investment (Holdings) Corporation (FEIH) and Indorama Ventures Holdings LP and Alpek, SAB de CV jointly obtained the original M&G USA Corp. in the United States The city of Detroit, Texas, has an annual capacity of 1.3 million tons of pure terephthalic acid (PTA) and an annual capacity of 1.1 million tons of polyester (PET) projects under construction and related assets.

In 2016, M&G launched an investment project in the city of Cosmopolitan, USA, which is the world's largest PTA and PET plant and the largest PTA plant in the United States. In the fourth quarter of last year, the company sold assets because it applied for bankruptcy and restructuring.

In this acquisition, the total value of the joint venture was 100 billion U.S. dollars (1.125 billion U.S. dollars, approximately 7.11 billion yuan), and the three parties each contributed one-third of the total. The amount of funds invested by Far East Investment (Holdings) Co. was 100 million U.S. dollars. US dollar (US$375 million), the three parties will independently purchase raw materials and obtain output quantities according to the ratio.

The project will also further assess the possibility of future expansion. This is Far East New Century following the signing of M&G's assets in the US West Virginia Polyester (PET) Plant and Ohio R&D Base in February this year. This case has yet to be approved by the U.S. bankruptcy court and related government departments.

Global layout, build a complete supply chain

The Far East New Century entered the polyester industry quite early. It is not only the Asian manufacturer of the first PET special bottle, it is currently the first in Asia, the top five polyester manufacturers in the world, and has production facilities in both Taiwan and the mainland, Vietnam. The new 400,000-ton PET plant is under construction and is expected to be put into production this year. At present, the Far East New Century has covered the upstream petrochemical raw materials, chemical fiber, and spinning, weaving, dyeing and garment businesses in the midstream and downstream, and has fully grasped the vertical integration niche. At present, both sides of the strait have built a complete supply chain and established a unified production and sales system.

This investment case is the largest investment project of Far East New Century Company in the United States. It focuses on the high-speed growth demand for polyester products in the United States and the Americas. It will be able to supply the market nearby and avoid trade barriers such as non-tariffs. In addition, the plant's strategic location, close to the supply chain of the international petrochemical giants in the United States Gulf of Mexico, will be able to fully use low-cost and adequate raw materials and energy, coupled with the use of the latest global manufacturing process, and the US tax reform through the tax Reduce other advantages.

This project together with the new production capacity in West Virginia last month will effectively enhance the company's industrial status and market competitiveness. In 2017, Far East New Century’s consolidated revenue was US$7.2 billion.

"Polyester Jianghu" big shuffle, leading companies will split up the entire market

Due to environmental restrictions and the inability of small-scale enterprises to expand production, the new capacity in the industry will mainly come from large companies. Among the new production capacity of 5.1 million tons in 2017-2019, leading enterprises such as Tongkun, Hengyi and Xinfengming will account for 75%, and almost all of the leading companies expanded their production in 18-19.

Not only is there a wave of acquisitions in the country, but companies such as the Far East New Century are now extending their hands abroad, and the “polyester rivers and lakes” big shuffle has already begun! With the acquisition of big brothers, the concentration of production capacity will be further strengthened and it is very likely that several leading companies will divide up the entire market in the future.

More importantly, from refining to weaving and dyeing and garments, leading companies have intervened in all aspects of the downstream. Dagu's appetite is not the biggest, only bigger. Who is the next one to be acquired? In 2018, how many small and medium-sized chemical fiber companies will be forced to fall under market pressure?