07.19.23
27/F., Fortis Tower, 77-79 Gloucester Road
Wanchai, Hong Kong
Tel: +852 2675 2288,
+760 8652 2330
www.yipsink.com
E-mail: LiJie@zs.yipsink.com,
Sales: US$171 million (HKD 1.34 billion); Yip’s Chemical’s consolidated sales were US$428 million (HKD3.36 billion)
Major Products: Gravure inks, offset printing inks, industrial inks, screen printing inks, UV inks and environmentally friendly inks used mainly in food and medicine packaging, tobacco packaging, offset and transfer printing; adhesives; dampening alcohol solution; cleanser.
Key Personnel: Stephen Yip, chairman; Brian Yip, deputy chairman; Kwong Kwok Chiu, GM; Lv Junxiong, sales director of Gravure Ink Division; Feng Wenzhao, technical director; Sara Suen, purchasing director; Pen Tse, financial director; Lin Meiju, plant director; Ma Zongcheng, sales director of Offset & UV Printing Ink Division; Yang Minghui, sales director of Industrial Ink Division.
Number of Employees: 690 (inks business)
(as of Dec. 31, 2022).
Comments: The largest domestic ink manufacturer in China, Yip’s Chemical Holdings Limited and its subsidiaries had an extraordinary year in 2022, as the group’s profit attributable to owners hit a record high of HK$1.22 billion, mainly due to the disposal of the Group’s 51% effective interests in the solvents business to PAG. However, the overall business environment was extremely
challenging.
“Geopolitical turmoil led to a global supply chain imbalance, and the pandemic affected market supply and demand, resulting in adverse effects on the Group’s core businesses in China in terms of costs, sales and operations,” a company spokesperson said. “Excluding the solvents business, the Group’s sales decreased by 16% year-on-year to HK$3.36 billion.”
As impacted by the pandemic, sales revenue of the ink business dropped by 11% year-on-year to HK$1.34 billion, while the gross profit margin only increased by 0.5 percent. The spokesperson noted that Bauhinia Variegata’s efforts in cost reduction delivered little results, especially coupled with the one-off special expenses incurred in relation to the proposed spin-off and separate listing application of Bauhinia Variegata Ink & Chemicals (Zhejiang) Limited on the Shenzhen Stock Exchange, leading the inks business to record a substantial decrease in operating results with an operating profit of approximately HK$9.4 million.
Subsequent to discussion by the management of inks business at its year-end meeting, decisions for bold reforms were made. Efforts will be prioritized to improve the quality of the businesses, instead of blindly pursuing revenue growth.
Efforts were also made to achieve substantial reduction in costs, including cutting down the size of the workforce by 15% by the end of 2022, and streamlining and merging compatible business lines as well as various compatible departments. It is believed that such cost reduction measures will significantly alleviate the burden of the inks business.
In addition, efforts will be made to develop promising, environmentally friendly and new types of high-quality ink products. The management holds the view that, although the aforesaid three measures may not generate substantial revenue in 2023, they will certainly bring new momentum to the segment in terms of sustainability, stability and development.
In order to enhance the competitiveness of its downstream products, Yip’s Chemical sold its controlling interest in its solvents business to PAG for RMB 2,295 million (approximately HK$2,688 million or US$340 million) in 2022 and continues to participate in the significant investment in upstream acetate solvents through its remaining 24% equity to create more value for the Group’s business partners and shareholders.
With this strategic partnership, the new associate will build an acetic acid plant with an annual production capacity of 600,000 tons in Hubei, China. It will further strengthen the market-leading position of the solvents associate as it would realize the vertical integration and increase control on the price and supply of raw material (acetic acid).
In important personnel news at Yip’s Chemical, Mr. Yip Tsz Hin (Stephen) stepped down from his role as the chief executive officer and Mr. Ip Kwan (Francis) was re-designated as the chief executive officer (previously the deputy CEO) with effect from Jan. 1, 2023.
In another highlight, Bauhinia Variegata tapped into new service markets by setting up its NAP Testing Technology Service. It envisions becoming a top-notch analytical laboratory and a leader in standards in China which delivers world-class trusted services. It is fully equipped with state-of-the-art lab equipment and experienced technical expertise to ensure meeting international and local regulations. It offers precise and quick testing services for sectors, including consumer goods, food contact material, and material testing and analysis to help clients improve performance and mitigate risks.
There was good news on the raw materials front.
“We observed that the price level of most of the key raw materials have stabilized. In 1Q 2023, the market demand was weaker than expected, so the raw material prices decreased when compared with last year. In addition, exports have fallen sharply. If the trend continues, the raw material prices are expected to drop again,” the spokesperson said.
The spokesperson sees strong opportunities ahead for Yip’s Chemical and its ink business in 2023, led by packaging printing.
“We believe that the overall business environment will improve in 2023 and it is expected to bring new momentum,” the spokesperson noted. “Our inks business is all set to improve the quality of the business, reduce costs, and develop new types of inks to increase competitiveness. We will also actively seek horizontal integration M&A opportunities to diversify our inks portfolio.
“The demand for packaging printing in China is expected to continue to rise at an average annual growth rate of around 4%, driven by China’s economic development and increased demand for consumer goods,” the spokesperson pointed out. “China has become the world’s largest consumer market and producer of packaging products, providing enormous opportunities for the development of the packaging printing industry.
“At the same time, changes in market demand and consumer upgrades are driving the packaging printing industry towards digital production and product differentiation. This requires improvements in equipment production efficiency, performance, and printing quality in multiple aspects to meet market demands.”
“In terms of printing ink types, environmentally friendly ink and green printing have become the main themes,” the spokesperson concluded. “Many countries have already banned the use of harmful printing materials in pharmaceuticals, food, and children’s products packaging, which has made environmentally friendly inks, such as odorless and solvent-free offset gravure inks, water-based inks, UV inks and EB inks, a trend and a necessary requirement for future ink development. This is also a factor that must be considered when entering the international market. The application of these environmentally friendly inks has been widely promoted and has broad prospects for application in the packaging printing industry.”
Wanchai, Hong Kong
Tel: +852 2675 2288,
+760 8652 2330
www.yipsink.com
E-mail: LiJie@zs.yipsink.com,
Sales: US$171 million (HKD 1.34 billion); Yip’s Chemical’s consolidated sales were US$428 million (HKD3.36 billion)
Major Products: Gravure inks, offset printing inks, industrial inks, screen printing inks, UV inks and environmentally friendly inks used mainly in food and medicine packaging, tobacco packaging, offset and transfer printing; adhesives; dampening alcohol solution; cleanser.
Key Personnel: Stephen Yip, chairman; Brian Yip, deputy chairman; Kwong Kwok Chiu, GM; Lv Junxiong, sales director of Gravure Ink Division; Feng Wenzhao, technical director; Sara Suen, purchasing director; Pen Tse, financial director; Lin Meiju, plant director; Ma Zongcheng, sales director of Offset & UV Printing Ink Division; Yang Minghui, sales director of Industrial Ink Division.
Number of Employees: 690 (inks business)
(as of Dec. 31, 2022).
Comments: The largest domestic ink manufacturer in China, Yip’s Chemical Holdings Limited and its subsidiaries had an extraordinary year in 2022, as the group’s profit attributable to owners hit a record high of HK$1.22 billion, mainly due to the disposal of the Group’s 51% effective interests in the solvents business to PAG. However, the overall business environment was extremely
challenging.
“Geopolitical turmoil led to a global supply chain imbalance, and the pandemic affected market supply and demand, resulting in adverse effects on the Group’s core businesses in China in terms of costs, sales and operations,” a company spokesperson said. “Excluding the solvents business, the Group’s sales decreased by 16% year-on-year to HK$3.36 billion.”
As impacted by the pandemic, sales revenue of the ink business dropped by 11% year-on-year to HK$1.34 billion, while the gross profit margin only increased by 0.5 percent. The spokesperson noted that Bauhinia Variegata’s efforts in cost reduction delivered little results, especially coupled with the one-off special expenses incurred in relation to the proposed spin-off and separate listing application of Bauhinia Variegata Ink & Chemicals (Zhejiang) Limited on the Shenzhen Stock Exchange, leading the inks business to record a substantial decrease in operating results with an operating profit of approximately HK$9.4 million.
Subsequent to discussion by the management of inks business at its year-end meeting, decisions for bold reforms were made. Efforts will be prioritized to improve the quality of the businesses, instead of blindly pursuing revenue growth.
Efforts were also made to achieve substantial reduction in costs, including cutting down the size of the workforce by 15% by the end of 2022, and streamlining and merging compatible business lines as well as various compatible departments. It is believed that such cost reduction measures will significantly alleviate the burden of the inks business.
In addition, efforts will be made to develop promising, environmentally friendly and new types of high-quality ink products. The management holds the view that, although the aforesaid three measures may not generate substantial revenue in 2023, they will certainly bring new momentum to the segment in terms of sustainability, stability and development.
In order to enhance the competitiveness of its downstream products, Yip’s Chemical sold its controlling interest in its solvents business to PAG for RMB 2,295 million (approximately HK$2,688 million or US$340 million) in 2022 and continues to participate in the significant investment in upstream acetate solvents through its remaining 24% equity to create more value for the Group’s business partners and shareholders.
With this strategic partnership, the new associate will build an acetic acid plant with an annual production capacity of 600,000 tons in Hubei, China. It will further strengthen the market-leading position of the solvents associate as it would realize the vertical integration and increase control on the price and supply of raw material (acetic acid).
In important personnel news at Yip’s Chemical, Mr. Yip Tsz Hin (Stephen) stepped down from his role as the chief executive officer and Mr. Ip Kwan (Francis) was re-designated as the chief executive officer (previously the deputy CEO) with effect from Jan. 1, 2023.
In another highlight, Bauhinia Variegata tapped into new service markets by setting up its NAP Testing Technology Service. It envisions becoming a top-notch analytical laboratory and a leader in standards in China which delivers world-class trusted services. It is fully equipped with state-of-the-art lab equipment and experienced technical expertise to ensure meeting international and local regulations. It offers precise and quick testing services for sectors, including consumer goods, food contact material, and material testing and analysis to help clients improve performance and mitigate risks.
There was good news on the raw materials front.
“We observed that the price level of most of the key raw materials have stabilized. In 1Q 2023, the market demand was weaker than expected, so the raw material prices decreased when compared with last year. In addition, exports have fallen sharply. If the trend continues, the raw material prices are expected to drop again,” the spokesperson said.
The spokesperson sees strong opportunities ahead for Yip’s Chemical and its ink business in 2023, led by packaging printing.
“We believe that the overall business environment will improve in 2023 and it is expected to bring new momentum,” the spokesperson noted. “Our inks business is all set to improve the quality of the business, reduce costs, and develop new types of inks to increase competitiveness. We will also actively seek horizontal integration M&A opportunities to diversify our inks portfolio.
“The demand for packaging printing in China is expected to continue to rise at an average annual growth rate of around 4%, driven by China’s economic development and increased demand for consumer goods,” the spokesperson pointed out. “China has become the world’s largest consumer market and producer of packaging products, providing enormous opportunities for the development of the packaging printing industry.
“At the same time, changes in market demand and consumer upgrades are driving the packaging printing industry towards digital production and product differentiation. This requires improvements in equipment production efficiency, performance, and printing quality in multiple aspects to meet market demands.”
“In terms of printing ink types, environmentally friendly ink and green printing have become the main themes,” the spokesperson concluded. “Many countries have already banned the use of harmful printing materials in pharmaceuticals, food, and children’s products packaging, which has made environmentally friendly inks, such as odorless and solvent-free offset gravure inks, water-based inks, UV inks and EB inks, a trend and a necessary requirement for future ink development. This is also a factor that must be considered when entering the international market. The application of these environmentally friendly inks has been widely promoted and has broad prospects for application in the packaging printing industry.”