On October 9, 2026, Xinxiang Chemical Fiber announced that, due to urban planning and construction needs, the Fengquan District People's Government intends to recover with compensation the company's approximately 98.85 mu of industrial land located at the northwest corner of the intersection of Muye Avenue and Genghuang Avenue. The company decided to suspend production, starting October 12, at its North Zone biomass cellulose filament production line and at its subsidiary Xinxiang Xinglu Technology Co., Ltd.
The shutdown involves biomass cellulose filament capacity of 31,200 tonnes per year. According to preliminary estimates by the company's finance department, it is expected to reduce filament output by about 8,500 tonnes in 2026, reduce operating revenue by about RMB 260 million, and reduce total profit by about RMB 40 million.
The first-phase compensation for the land and above-ground attachments totals RMB 51.2334 million. Subsequent agreements will be signed separately based on demolition and relocation progress, asset disposal, and acceptance.
As of the end of 2025, the net equipment asset value of the North Zone production line was RMB 425.7336 million, accounting for 6.36% of the company's latest audited net assets.
The company stated that, apart from the production line suspended this time, its other main production facilities remain in normal operation, and the suspension will not have a material adverse impact on its ability to continue as a going concern in the future. During the suspension period, the company will coordinate the capacity of its other operating units, rationally allocate production arrangements, and orderly advance relocation, equipment disposal, and asset verification.
While shutting down the conventional production line in the North Zone, Xinxiang Chemical Fiber is advancing new projects. In July 2026, the company announced a private placement plan to raise no more than RMB 1.3 billion, to fund a high-quality biomass cellulose filament and supporting facilities project and a Juncao materials high-value utilization R&D center project. Of this, the filament project plans to invest RMB 970 million of the raised funds. After reaching full production, it will add 20,000 tonnes of biomass cellulose filament capacity, focusing on functional and differentiated high-end products.
The company is also extending upstream into raw materials, conducting fractional separation and deep development of core components in Juncao such as cellulose, hemicellulose, and lignin, and exploring application directions such as the preparation of bio-based aviation fuel and bio-based spandex raw materials. Traditional biomass cellulose filament production relies heavily on wood pulp as a raw material, with a relatively high proportion of imports, leaving broad room for substitution by low-cost, renewable Juncao pulp.
The 31,200 t/y production line in the North Zone has been suspended due to the land recovery, while the 20,000-tonne high-end filament project in the private placement and the Juncao raw material R&D continue to advance. The company's filament capacity scale has contracted somewhat, and its product mix is being adjusted toward the high end.
