Hualian China’s 2020 Packaging Procurement Hits RMB 87.2932 Million: Top Five Suppliers and Order Split

For a ceramics manufacturer with annual revenue close to RMB 1 billion, how much do cartons, color boxes, and fillers cost each year? And how large a slice of that spend goes to its top five packaging suppliers? Hualian China’s disclosures offer a clear case study.

2020 at a glance: RMB 921 million revenue, RMB 87.2932 million packaging procurement

Hunan Hualian China Industry Co., Ltd. (Hualian China) recently began trading on the Shenzhen Stock Exchange’s A-share main board. The company is a professional ceramics group and a key ceramic liquor bottle supplier to well-known baijiu brands such as Kweichow Moutai and Wuliangye. In 2020, it recorded RMB 921 million in revenue and RMB 120 million in net profit.

Because ceramics are inherently fragile, ceramic producers often demand stronger protective performance from packaging than companies in food or electronics do, and their packaging budgets tend to be larger. Hualian China fits that pattern: its 2020 packaging procurement reached RMB 87.2932 million, or 21.82% of total procurement.

Its packaging mix includes cartons, color boxes, and fillers, with cartons taking the largest share. In 2020, the average price of externally purchased carton-type packaging was 5.37 per square meter, unchanged from 2019 and 0.97 percentage points lower than in 2018—a signal of recent pricing trends in paper packaging.

Based on the procurement value and average price, Hualian China purchased 16.2557 million square meters of packaging materials in 2020. Since cartons dominate the mix, actual carton consumption should be close to that figure. Shared across several carton plants, this volume would still deliver millions of yuan in annual revenue to each supplier.

Five packaging suppliers share the order pool

Which companies made Hualian China’s supplier list?

According to its prospectus, Hualian China generally chooses packaging suppliers near its operations, except when downstream customers designate certain suppliers. For larger orders and high-volume packaging, it uses tenders to select suppliers offering relatively lower prices, reliable after-sales support, and timely, stable delivery.

As a result, four of its top five packaging suppliers in 2020 are based in Liling City, where Hualian China is located: Liling Juli Packaging, Liling Xiangxie Paper Export Packaging, Liling Huacai Packaging, and Liling Xingfa Paper Packaging. The fifth, Changsha Kangle Packaging, sits just over 100 kilometers away.

Liling Juli Packaging ranked first, selling RMB 9.6394 million worth of packaging to Hualian China in 2020, equal to 11.04% of the company’s total packaging procurement. Liling Xiangxie Paper Export Packaging followed with RMB 9.6062 million, or 11%.

Changsha Kangle Packaging, Liling Huacai Packaging, and Liling Xingfa Paper Packaging reported similar sales to Hualian China: RMB 7.6252 million, RMB 7.2957 million, and RMB 6.1042 million in 2020, accounting for 8.74%, 8.36%, and 6.99% of total packaging procurement, respectively.

Liling Huacai Packaging is also an affiliate of Hualian China. Established in 2008, it mainly produces and sells color boxes and cartons. It operates imported four-color printing presses and delivers strong printing of packaging graphics and colors, meeting Hualian China’s requirements.

With the listing completed, Hualian China’s daily-use ceramics production line technical upgrade project, ceramic new materials production line project, and other initiatives will receive proceeds from the fundraising. In other words, its capacity will expand further and packaging demand will keep rising—clearly positive for its packaging suppliers.

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