Our company is in the business of producing and selling bromine and crude salt.
We extract these materials from concentrated underground brine water reserves.
The government has granted our company the rights to tap and extract brine
water resources from reserves underneath approximately 24 square kilometers of
land in Weifang City, Shandong Province, and we are applying for the mineral
rights to approximately 10 square kilometers of land on which we plan to
construct a salt farm in Dongying City, Shandong Province, China. We also use
our self-developed processing technology to manufacture and sell brominated
specialty chemicals, including decabromodiphenyl ether and decabromodiphenyl
ethane, which are used as flame retardants in a variety of applications such as
automobiles, electronic appliances and equipment, furniture and construction
materials; and also including hydrobromic acid, which is used to produce other
bromine compounds and itself is widely used in the medical, dyeing and perfume
industries. Our business operations are conducted in two segments: (a) bromine
and crude salt and (b) specialty chemical products. We conduct all of our
operations in China and sell substantially all of our products to customers in
China. We are located near China’s chemical and pharmaceutical manufacturing
base and its rapidly growing market.
We entered the bromine and crude salt production business in 2003 when Shandong
Haiwang built its first plant. In this operating segment, we mainly
manufacture bromine and crude salt for customers in China’s chemical and
pharmaceutical industries. Bromine is a basic raw material widely used in a
variety of applications such as flame retardants, medicines, agricultural
pesticides, dyes, oil exploration and fine chemistry engineering. Crude salt
also has a wide variety of industrial purposes as a basic chemical raw
material. China is the world’s largest producer and the world’s largest
consumer of crude salt. We are the largest privately-owned crude salt producer
producing crude salt from seawater in China.
The PRC laws require the licensing of bromine producers to produce bromine.
Currently, approximately 75 bromine producers have been licensed in Shandong
Province. In response to this policy, we have implemented a strategy of
acquiring small bromine and crude salt producers. Since 2003 we have
acquired the operating assets and related mining permits of 5 small bromine
producers in Weifang City and one additional bromine factory in Dongying City,
Shandong Province. As a result we now operate 7 bromine factories with 18
bromine production lines with a production capacity of 18,000 metric tons per
year. We are one of the largest bromine producers in China in terms of
production capacity and output. Our bromine factories are spread across 3 salt
farms, which are used for producing crude salt from bromine production waste
water, and which have a total annual production capacity of 1.02 million
of crude salt. We also lease one property of 10 square kilometers to construct
salt farm in Dongying City, Shandong Province. We are currently planning to
salt pans on this salt field. We expect to complete construction and reach
% of our crude salt capacity in mid-2011. Once we reach capacity, we expect
salt farm to yield an additional 350,000 tons per year, for a total of 1.37
tons. We also lease space on our salt pans to smaller crude salt producers.
Our brominated specialty chemicals include decabromodiphenyl ether,
decabromodiphenyl ethane and hydrobromic acid. Our decabromodiphenyl ether
and decabromodiphenyl ethane can serve as flame retardants due to their
excellent thermal stability and low toxicity, and thus have been widely
by the market and are undergoing a rapid growth stage in China. These
same characteristics also allow them to be widely used in a variety of
other areas including polymer composite materials, plastic, fiber and building
materials. The brominated flame retardant is the most widely used flame
retardant in China due to its excellent capability and lower price.
Approximately 50% of all flame retardants used in China are brominated
flame retardants. We anticipate that the Chinese government will in the
future tighten the implementation of rules it has enacted in the compulsory
application of flame retardants on construction materials to lessen damages
from fire disasters. Our hydrobromic acid is used to produce other bromine
compounds, and itself is widely used in a variety of industries such as
medicine, dyeing and perfume. We are among the top three decabromodiphenyl
ether and decabromodiphenyl ethane producers in China in terms of production
We use our self-developed processing technology to manufacture and sell
brominated specialty chemicals. We also invest in bromine production
and assemble high-caliber bromine reservoirs, agitated reactors, buffer
tankers and pipes into a reaction system to optimize output while maintaining
production safety with our self-developed processing technologies.
We currently derive the majority of our revenues from our bromine and crude
salt operating segment. However our brominated specialty chemical products
segment has been providing an increasing contribution to our total revenue,
and we plan to increase our focus on this segment in the future.
In recent years, we have experienced rapid organic growth. Our net revenue
grew from $49.86 million in fiscal 2009 to $64.8 million in fiscal 2010,
representing a growth rate of 30%. Our net income grew from $4.73 million to
$6.76 million during the same period, a growth rate of 42.9%. Our net revenue
grew to $56.7 million in the six months ended December 31, 2010 from $32.87
million in the same period in 2009, representing a growth rate of 73%. Our
net income grew to $14.23 million in the six months ended December 31, 2010
from $2.8 million in the same period in 2009, representing a growth rate of
Our principal executive office is located at Haiwang Street, Yangzi Ave.,
Economic Development Zone, Weifang City, Shandong Province, China 261108. Our
telephone number is (+86) 536 7578 888. Our fax number is (+86) 536 7578 888.
The website for Shandong Haiwang is www.sdhwchem.com.