Fujian Kuncai Material Technology Co. Ltd. (603826.SS) is pleased to announce the formation of two new subsidiaries, Zhengtai and Fushi Material Technology Ltd., that will enable the company to pursue two fresh strategic directions in its further development. One objective is to extend the product portfolio to include different types of pigment, another is to build and strengthen an integrated supply chain for the existing effect pigment production environment.

Fushi Material Technology Ltd. will focus on the production of titanium oxychloride and ferric chloride, which will primarily be used for the in-house production of effect pigments at the parent company, Fujian Kuncai Material Technology Co. Ltd. The investment secures an independent supply for the parent company and further supports Kuncai’s ambition to reduce the environmental impact of effect pigment production by implementing a new industry standard for production engineering which reduces the use of natural resources and energy in the overall process. This step further underlines Kuncai’s approach to a fully integrated effect pigment production process with a united supply chain from self-produced synthetic mica substrate to its own coatings raw materials and self-engineered production processes. With this development, Kuncai will be well positioned to steer its own effect pigment development and produce Best-in-Class pigments.

Zhengtai is located in Fuzhou Jiangyin Industrial Park in the town of Fuzhou in Southern China and will concentrate on the production of high-quality titanium dioxide. The new factory will employ a specially developed, unique proprietary extraction technology in the production process. The plant is being built with a top future production capacity of around 500,000 metric tons. The facility will also produce a range of iron oxide grades with future production capacity of 400,000 metric tons to expand Kuncai’s portfolio of colored inorganic pigments. Construction is currently still ongoing. The first technical quantities of titanium dioxide and the iron oxide grades are expected to become available end of 2020, initially on the domestic Asian market.