Youfu Co., Ltd. plans to change the annual production of 35,000 tons of rubber skeleton new material technical transformation project

China Securities Journal China Securities Network reported that (Reporter: Jing Luo) under dual pressure, Yufeng Co., Ltd. has made a cautious adjustment to major investment projects under its ownership.

On the evening of March 26, the company issued an announcement stating that it held a board meeting today and approved the resolution on the “Yearly 35,000-ton Green and Intelligent Production Technological Upgrade and Retrofit Project for Rubber Skeleton New Materials,” deciding to terminate part of the capacity construction and reduce the project scale to 13,000 tons. At present, the resolution still needs to be submitted to the company’s general meeting of shareholders for approval before implementation.

According to the announcement, the “Yearly 35,000-ton Green and Intelligent Production Technological Upgrade and Retrofit Project for Rubber Skeleton New Materials” was first approved by the company’s board of directors in April 2023. The plan was to invest in building annual production of 35,000 tons of rubber skeleton new materials, covering multiple product categories such as impregnated cord fabric, impregnated ropes for rubber skeleton, and impregnated canvas. However, over the past two years, the industry environment has undergone significant changes.

Based on the company’s announcement, as of early 2026, the project’s annual production of 3,000 tons of impregnated ropes has entered the installation and commissioning stage, and the annual production of 10,000 tons of cord fabric blanks has also been commissioned and put into operation. But the remaining construction content of annual production of 16,000 tons of impregnated cord fabric and annual production of 6,000 tons of impregnated canvas has not been able to enter the construction stage for a long time. This is because, as the overall industry is currently in a state of supply overhang, market prices have continued to fall, and the combination of internal and external factors such as international trade and insufficient electricity load for the project requires a reassessment of the necessity and feasibility of project implementation.

Based on this, the company decided to terminate the construction of the total 22,000 tons of capacity mentioned above and change the project to the “Yearly 13,000-ton Green and Intelligent Production Technological Upgrade and Retrofit Project for Rubber Skeleton New Materials.” The total investment amount is expected to be approximately RMB 220 million, with the final figure subject to the final completion and settlement.

Yufeng Co., Ltd.’s move to contract capacity reflects the current survival situation of the polyester industrial filament and rubber skeleton materials industry. As introduced, Yufeng Co., Ltd.’s polyester industrial filament is widely used in rubber skeleton materials such as tire cord fabric and conveyor belt canvas, with downstream applications covering multiple fields including automobiles, infrastructure, and environmental protection. However, in recent years, although industry concentration has continued to increase, competition among ordinary industrial filaments has intensified, and profit margins have been continuously compressed; differentiated, high-value-added products have become the direction for breakthroughs.

It is worth noting that, thanks to focusing on its main business, adjusting its product structure, and further promoting cost reduction and efficiency improvement, Yufeng Co., Ltd. expects to turn a loss into a profit in 2025. The company expects that in 2025, its net profit attributable to shareholders of listed companies will be RMB 26 million to RMB 39 million, compared with a loss of RMB 26.9357 million in the same period last year.

【Source: China Securities Journal · China Securities Network】