"This is just the first phase of a nano-calcium carbonate project developed by Shanda Group in Shaanxi. The second phase, with an annual capacity of 400,000 tons, is set to begin in 2007, and the third phase will expand production to 500,000 tons per year. The total investment for the entire project is 9 billion yuan. By 2010, Shanda Group's nano-calcium carbonate production capacity is expected to exceed 1 million tons," said Liu Peixiang, director of the Shaanxi Qianxian Investment Promotion Bureau, as he eagerly shared the details with a reporter.
The figure of 1 million tons surprised the reporter. According to existing market data, the national demand for nano-calcium carbonate by 2010 is estimated to be no more than 750,000 tons. Based on current projects under construction or proposed, including a 20,000-ton/year facility in Xinjiang Hami with a 50 million yuan investment, a 10,000-ton/year project in Heilongjiang Changbai Quanyuan Wood Company, an 80,000-ton/year project by Hebei Pingquan Lihua Cement Company, and others, there are over 30 such projects nationwide. Together, they represent more than 1.5 million tons of production capacity and a total investment exceeding 13 billion yuan.
Given this, is nano-calcium carbonate, a high-tech material, also falling into the trap of overcapacity?
"Currently, domestic demand for nano-calcium carbonate continues to grow, but the supply remains limited, especially for high-end products below 60 nanometers, which require large imports annually. That’s why many companies are investing heavily in this sector," said Xu Yunhai, director of Shanxi Orchids Huamin Nano Materials Co., Ltd.
According to a project leader from Shaanxi Haize Nanomaterials, before 1995, China relied entirely on imported technology for nano-calcium carbonate. In 1995, breakthroughs at institutions like Beijing University of Chemical Technology and East China University of Science and Technology sparked an investment boom. Companies such as Guangping Chemical, Jiawei Industrial, Shandong Shengda, and Shanxi Orchid built over 20 production lines. By 2004, China produced 230,700 tons of nano-calcium carbonate, increasing to 250,000 tons in 2005.
Despite this growth, the demand increased by an average of 15% during the Tenth Five-Year Plan period, and domestic production still couldn’t meet the rising needs. As a result, China imported about 100,000 tons of nano-calcium carbonate annually. This gap has driven significant investment in the sector.
However, behind this potential lies a risk: overproduction and mismatch between supply and demand.
Experts point out that the development of new applications for nano-calcium carbonate is slow and challenging. Although demand is growing, the absolute size of the market remains relatively small. For example, China started developing nano-calcium carbonate applications in the early 1990s, but by 2005, 15 years later, the demand was only 300,000 tons. Even though China's production capacity is now over 400,000 tons, with equipment utilization below 75%, the country still imports over 100,000 tons annually. This indicates that the problem isn't a lack of overall capacity, but rather a shortage of high-end products and an oversupply of low-end ones.
What the market truly lacks are high-value, specialized products. If these new projects don’t focus on those critical areas, their scale won’t translate into profitability or competitiveness.
By 2010, China's nano-calcium carbonate production capacity is projected to surpass 1.9 million tons—nearly 4.7 times the current level. Such rapid growth is not only impressive but also alarming. Even if demand grows at an annual rate of 20%, it would reach only 750,000 tons by 2010. What happens to the remaining 1.1 million tons? Will the facilities remain idle? Or will companies engage in cutthroat price competition? If the industry continues to expand at this pace, many firms may find themselves trapped in overcapacity.
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