According to the 2015 annual report released recently by Hangzhou Hangyang, China’s leading air separation equipment manufacturer and local industrial gas producer, the trend to reduce production capacity and stock in end-user industries in the country in the coming years will definitely have a negative impact on the profitability of the group’s equipment business.
Downstream industries in question include the steel sector and petrochemical industry.
Although the company recorded gross operating income of RMB 5.9bn ($920.5m) in 2015 that was broadly the same as that of 2014 ($919.6m), income of RMB 2.7bn ($413.7m) from equipment manufacturing – which includes air separation plants, ethylene cold boxes, LNG process and package equipment, and other petrochemical equipment – showed a substantial drop of 11.4% when compared with income of RMB 3bn ($466.8m) in 2014.
More specifically, income from the manufacture of air separation equipment dropped 6.5% from RMB 2.6bn ($404.7m) in 2014 to RMB 2.4bn ($378.5m).
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