Revenue Tops 900 Million Yuan, Packaging Costs 87 Million Yuan! Who Are This Ceramic Company's Carton Suppliers?

How many cartons, color boxes and other packaging materials does a ceramics company with annual revenue of about 1 billion yuan need to purchase every year? And how many orders can its top five packaging suppliers win from it? Let us take a look.

Revenue of over 900 million yuan, packaging procurement of 87 million yuan

Not long ago, Hunan Hualian China Industry Co., Ltd. (hereinafter referred to as Hualian China) was successfully listed on the A-share main board of the Shenzhen Stock Exchange. It is a professional ceramics group company and an important supplier of ceramic liquor bottles for well-known liquor companies such as Kweichow Moutai and Wuliangye. In 2020, Hualian China achieved revenue of 921 million yuan and net profit of 120 million yuan.

As is well known, ceramics are very fragile due to the inherent properties of the material itself. For this very reason, compared with companies in the food and electronics industries, ceramics companies may have higher requirements for certain packaging performance, and their packaging procurement amounts are also relatively large. The same is true of Hualian China. In 2020, its packaging procurement amounted to 87.2932 million yuan, accounting for 21.82% of its total procurement amount.

Hualian China's packaging materials include cartons, color boxes, fillers and others, among which cartons account for the largest share. In its 2020 procurement, the average price of carton-type packaging materials purchased externally by Hualian China was 5.37 per square meter, flat with 2019 and 0.97 percentage points lower than 2018, which also reflects to a certain extent the product price changes of paper packaging companies in recent years.

Given the known packaging procurement amount and average packaging price, it is easy to conclude that Hualian China purchased 16.2557 million square meters of packaging materials in 2020. Considering that cartons account for the largest share, this figure should be close to its carton consumption. Even if such a procurement volume is shared among several carton plants, each of them would still earn millions of yuan in revenue every year.

Five major packaging plants share large orders

So which companies are able to win orders from Hualian China?

In its prospectus, Hualian China stated that, except for some packaging materials whose suppliers are designated by downstream customers, the company generally adopts a strategy of selecting packaging suppliers nearby. For larger orders and packaging materials with large supply volumes, the company selects, through bidding, packaging suppliers with relatively lower prices, good after-sales service and the ability to supply promptly and stably.

Therefore, among Hualian China's top five packaging suppliers in 2020, four are located in Liling City, where the company is based: Liling Juli Packaging, Liling Xiangxie Paper Export Packaging, Liling Huacai Packaging and Liling Xingfa Paper Packaging, along with Changsha Kangle Packaging, which is only just over 100 kilometers away from Hualian China.

Among them, Liling Juli Packaging is Hualian China's largest packaging supplier, selling 9.6394 million yuan worth of packaging materials to Hualian China in 2020, accounting for 11.04% of Hualian China's total packaging procurement. Next is Liling Xiangxie Paper Export Packaging, whose packaging sales of 9.6062 million yuan accounted for 11% of Hualian China's total packaging procurement.

The packaging sales of Changsha Kangle Packaging, Liling Huacai Packaging and Liling Xingfa Paper Packaging were relatively close to each other, at 7.6252 million yuan, 7.2957 million yuan and 6.1042 million yuan respectively in 2020, accounting for 8.74%, 8.36% and 6.99% of Hualian China's total packaging procurement respectively.

Incidentally, Liling Huacai Packaging is an affiliated company of Hualian China. Founded in 2008, it mainly produces and sells color boxes, cartons and other products. It has imported four-color printing presses, and its printing of packaging patterns and colors is of good quality, which can meet the requirements of Hualian China.

With this successful listing, Hualian China's daily-use ceramics production line technical transformation project, ceramic new materials production line project and other projects will also receive investment from the raised funds. In other words, Hualian China's production capacity will further expand and the amount of packaging it needs will further increase, which is undoubtedly good news for its packaging suppliers.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378786.html