Shandong Dawn Polymer Materials Terminates 500 Million Investment in Biodegradable Project

On March 10, 2025, Shandong Dawn Polymer Materials Co., Ltd. (the "Company") convened the 21st meeting of its fifth board of directors, where it approved the resolution to terminate the investment in the Dawn Biodegradable Materials Project. Here are the critical details surrounding this decision.

In a move to enhance its strategic positioning and promote future growth, the Company initially approved the investment in the biodegradable materials project during the 20th meeting of its fourth board on March 11, 2022. This initiative aimed to extend the Company's biodegradable supply chain and bolster its market competitiveness by investing 500 million yuan in the establishment of the Dawn Biodegradable Materials Project in Qingdao's Jimo District. The project was planned to unfold in two phases, focusing on the production of biodegradable raw materials, soft packaging products, biodegradable straws, cutlery, and food containers.

As of the announcement date, the progress of the project included a capital investment of 49.89 million yuan, which was utilized to acquire the rights to a state-owned construction land plot in Qingdao. However, the overall advancement of the project has faced significant challenges.

Despite the favorable policy environment promoting biodegradable plastics due to recent bans and restrictions on plastic use, the biodegradable materials market has encountered multiple challenges. These include weak demand growth, overcapacity, and intensified market competition, leading to increasing market pressures. After a thorough reassessment of the market conditions and the project's current status, the Company decided to terminate the project. This decision aims to prevent further waste of resources and mitigate potential economic losses, thereby safeguarding the interests of the Company and its shareholders.