On July 12th, with the theme of " Company of Raw material for mask transforms to digest the remaining capacity ", Ta Kung Pao focused on Dawn with whole page, reported from the three aspects of industry, talent, and innovation, fully recognized Dawn's contribution during the COVID-19, and analyzed the "road" of transformation and upgrading in the post-epidemic era, further affirming Dawn's leading position in the new materials industry.

"Last year, in order to prevent and control the epidemic and resume work and production, the daily output of Dawn Polymer (002838.SZ) special melt-blown polypropylene (PP) materials (hereinafter referred to as " melt-blown materials") reached 1,200 tons, which can meet the production needs of 1.2 billion masks." Yu Xiaoning, chairman of Dawn Polymer, told the reporter of Ta Kung Pao that when the COVID-19 was severe at the beginning of last year, orders for melt-blown materials surged. Dawn Polymer completed the expansion project in only 15 days and provided sufficient raw materials for melt-blown fabric production enterprises in more than 20 provinces and cities across the country. 

Tian Hongchi, general manager of Dawn Polymer, used "double regression" to describe the current melt-blown material market. "The price of melt-blown materials has returned to the normal level before the COVID-19; the market demand is also on the way back, but it is still about twice the demand before the COVID-19." . Tian Hongchi said frankly that the current domestic production capacity of melt-blown materials was generally higher than market demand.

Dawn Polymer is the largest manufacturer of melt-blown PP materials-the raw material for medical mask fabrics in the mainland. The overcapacity of the entire industry is also in Xiaoning's expectations. Before the COVID-19, Dawn’s daily orders for melt-blown materials were only about 100 tons, but the order volume surged at the end of January last year, which severely exceeded the company’s production capacity. Before the expansion of production last year, Yu Xiaoning and Tian Hongchi analyzed the pros and contras If the production lines were expanded, some problems would definitely arise in the future. If there was no expansion, the epidemic demand would not be met, and then there would be counterfeit melt-blown materials on the market. "  

Buyout non-woven fabric enterprise

Research and Develop downstream products

"This is anti-epidemic material, which is related to human life and health!". Yu Xiaoning said that it was the responsibility of the company and it must be done. “Take the bull by the horns”. It was too late to re-customize equipment, so Yu Xiaoning disassembled and transformed the equipment for other products such as home appliance materials and automobile materials, increased the number of workers to more than 200 for melt-blown pp material. It only took 15 days for Dawn to complete the melt-blown material expansion project.

At that time, the price of melt-blown fabrics has increased from CNY 20,000/ton to CNY hundreds of thousands per ton. As the largest supplier of melt-blown materials required for melt-blown fabrics, Dawn polymer supplied melt-blown materials openly. Yu Xiaoning told reporters that Dawn’s production capacity has increased more than ten times, and the expansion of production capacity has played an important role in stabilizing the market price of melt-blown materials.

"Some of the production capacity that has been increased quickly will be transferred back soon." Tian Hongchi said that in accordance with the control of COVID-19, Dawn adjusted the production capacity of melt-blown material production line and switched products to digest the new production capacity. In addition to being used in masks and protective clothing, melt-blown materials can also be used to produce diapers, sanitary napkins and other fields. SWT is one of the few companies in the mainland that can produce high-quality nonwovens. Dawn acquired it last year to jointly develop downstream products of high-end melt-blown materials such as personal hygiene products and medical protective products. After Dawn's high-end medical and health nonwoven fabric production project is fully completed, it can form a production scale with an annual output of 100,000 tons of nonwoven fabrics.

Large overseas demand！The export volume of melt-blown materials doubled

Currently, there is no timetable for the elimination of the global epidemic. As a rigid demand product, people will have a high demand of masks for quite a long time. Tian Hongchi said frankly that Dawn Polymer's overseas exports of melt blown materials have been growing, and the current export volume of melt-blown material is significantly higher than before the epidemic. In the first five months of this year, Dawn Polymer’s melt-blown materials exported 2,000 tons, which doubled from the same period in 2020. They were mainly exported to nearly 30 countries and regions including North America, Europe, Southeast Asia, and the Middle East.

Dawn Polymer's main business is functional polymer composite materials such as thermoplastic elastomers, modified plastics and masterbatches, melt blown materials. Because of the increasing demand for epidemic prevention materials, Dawn’s performance in 2020 soared more than four times. The company achieved operating income of CNY4.42 billion and net profit attributable to shareholders of listed companies of CNY 855 million, an increase of 61.67% and 414.51% year-on-year respectively. Tian Hongchi said that after a period of adjustment in Dawn's stock price and market value, it will eventually return to the core product business.

Entering into biodegradable plastics industry to cultivate new growth points

With the introduction of China's plastic restriction policy, the market demand for degradable plastics (PBAT, decomposable plastics) has grown rapidly. According to estimates by Guosen Securities, there is a potential demand of 10.17 million tons of biodegradable plastics, corresponding to a market size of about CNY 177.7 billion. Dawn polymer is also accelerating its deployment in the field of degradable materials, and Yu Xiaoning uses "blue ocean" to describe the degradation market. As a leading company in the field of modified plastics, he hopes to continue to lead the development in the field of biodegradable plastics.

In April, Dawn Polymer announced that it would invest in the establishment of a wholly-owned subsidiary Shandong Dawn Biodegradable Materials Co., Ltd., and a holding subsidiary Shandong Dawn Zhoushi Plastic Packaging Co., Ltd, which marked that Dawn fully entered into the degradation field, continued to extend to the upstream and downstream of biodegradable plastics, and opened up a one-stop industrial chain in the fields of R&D, manufacturing, and packaging.

Dawn polymer announced in June that it planned to raise CNY 851 million in additional funds. The funds are mainly used for the new biodegradable plastic project (Phase I) and the Southwest Headquarters Base Project of Dawn Polymer (Phase I). Its Southwest Headquarters Base Project (Phase I) will plan to build a production base and R&D center for modified plastics, modified biodegradable materials and other products.

Crude oil is the source of plastic raw materials, and its price directly affects the cost of degradable plastics. At present, the cost of degradable plastics is slightly higher than that of traditional plastics. But Yu Xiaoning believes that from the technical level and application field level, degradable plastics can be marketed completely. Dawn Polymer has completed the accumulation of technology and products, and degradable plastics will become its new growth point.

Focuses on Innovation to continuously break the Western technology monopoly

Helmets, mobile phone cases, sports shoes, rice cookers, car airbag frames, aircraft fuel pipes etc. Compared with the popular melt-blown materials, the dazzling array of products in the Dawn exhibition hall has long been integrated into the lives of ordinary people.

"Dawn Polymer is a new material company with technical barriers." Tian Hongchi sorted out the core technologies that Dawn polymer had overcome since its establishment. 16 international advanced technologies, 9 domestic leading technologies, 6 technologies that fill the domestic gap. In 2008, Tian Hongchi successfully developed the thermoplastic elastomer TPV technology, which won the second prize of the National Technical Invention Award. It solved the world problems of difficult rubber recycling and black pollution, and broke the technological monopoly of a few developed countries such as the United States and Japan. Today, Dawn polymer has developed into the third largest TPV manufacturer in the world.

Hydrogenated nitrile rubber (HNBR) is widely used in aerospace, automobile manufacturing, rail transportation, oilfield mining, and other fields. It is one of the special rubbers with the most comprehensive performance and belongs to the national strategic material. Because of the difficulty of preparation, it has always been one of the "stuck neck" technologies developed by China's special rubber. Since 2009, Dawn polymer has invested a large amount of research and development funds, and begun to intervene in laboratory research and development in cooperation with Beijing University of Chemical Technology. After ten years of hard work, in June 2019, hydrogenated nitrile rubber finally moved from laboratory research results to industrialization, and eventually developed into the top industrialization platform of Dawn.

In the field of China's rubber industry, Tian Hongchi has made China's rubber industry reach the internationally advanced level. Another "snap neck" technology currently underway by Tian Hongchi is to prepare a new type of rubber material (DVA) for the gas barrier layer for new high-performance tires.

"The air tightness of DVA material is 7-10 times that of traditional tires. It can be made thinner. One tire can reduce one kilogram weight, and four tires can reduce 4 kilograms, which means the car can run 5-8% more mileage." According to Tian Hongchi, the project began research and development in 2013, and the pilot scale test study has been completed. The tires made by DVA will be more fuel-efficient. Once the project is successful, China will save billions of yuan in fuel costs every year. This will be another flagship product of Dawn. The only company that masters this technology in the world is Exxon Mobil, and Dawn will be the second company.

Bringing in technical professionals and sending Beijing's house to them

"In 1998, I bought a batch of houses within Beijing's Fourth Ring Road. Once a technician is hired, he will get a house first, so that they would have no worries about the future." Yu Xiaoning said that the first batch of technicians brought in from Beijing have retired, and the house value has also increased. He also smiled and said that he had just forgotten to buy a house for himself. In Dawn, Yu Xiaoning does not allow employees to say that they are working for Dawn but realizing self-worth value. Yu Xiaoning hopes that the high-end technology platform he has built is an inclusive "soil" that will allow the "seeds" of every talent of Dawn to take root and blossom.

Yu Xiaoning said, “The development of a private enterprise doesn’t depend on diligence and personal wisdom. It relies on technical talents.” Yu Xiaoning teamed up with Beijing University of Chemical Technology in 2003 to set up the "Dawn-Beijing Thermoplastic Elastomer Material Joint R&D Center".

Tian Hongchi told reporters that the high-performance thermoplastic elastomer (TPV) he developed in 2002 achieved a technological breakthrough in the laboratory, and this project was also targeted by Yu Xiaoning. At that time, the project had not yet undergone a pilot scale test. It just produced a few kilograms per hour, so the investment risk was very high. But at that time, Yu Xiaoning invested more than CNY 10 million and returned a 25% stock shares to Beijing University of Chemical Technology. In 2003, Tian Hongchi, who graduated with a Ph.D. from Beijing University of Chemical Technology, gave up the opportunity to stay at the school and resolutely came to Dawn.

However, the technology has encountered technical difficulties in industrialization from the laboratory test to the transformation of results. The money invested was also all spent in less than 3 years, and Tian Hongchi encountered family pressure from his wife’s request on him to return to Beijing for family. "When he told me that he wanted to resign, I was really going to collapse." Yu Xiaoning still remembered what he said to Tian Hongchi's wife on the phone: “If you ask Tian Hongchi to go back home, he will play the role of a husband. But if he stays at Dawn, he will definitely be a successful man. If you ruin his career, you ruin a successful man”

In the end, Yu Xiaoning and Tian Hongchi’s wife reached an agreement: 15 days in Beijing, 15 days in Longkou, and 15 days in the market. Yu Xiaoning also established a R&D center in Beijing for Tian Hongchi. It led to the successful production of TPV later, which broke the long-term import dependence of China's TPV.