Xinxiang Chemical Fiber announced on October 9 that, due to urban planning and construction and the government's repossession of part of its state-owned construction land use rights, the company's biomass cellulose filament yarn production line in the northern area and its subsidiary Xinglu Technology will suspend production from October 12, 2026, involving capacity of 31,200 tonnes per year. Revenue in 2026 is expected to fall by about 260 million yuan, with total profit reduced by about 40 million yuan. The announcement showed that the Fengquan District People's Government of Xinxiang intends to reclaim, with compensation, the company's transferred industrial land use rights on a plot of about 98.85 mu at the northwest corner of Muye Avenue and Genghuang Avenue. The first-phase compensation for the land and above-ground attachments totals 51.2334 million yuan. As of the end of 2025, the net asset value of the northern area production line equipment was 425.7336 million yuan, accounting for 6.36 percent of the company's most recently audited net assets. Xinxiang Chemical Fiber said that apart from the production line being halted this time, its other main production facilities remain in normal operation, and this overall matter will not have a material adverse impact on the company's future continuing operations. The company has annual biomass cellulose filament yarn capacity of 110,000 tonnes, of which 31,200 tonnes per year is affected by this suspension. The company also plans to raise 1.3 billion yuan to build high-quality biomass cellulose filament yarn and supporting projects, which will add 20,000 tonnes per year of biomass cellulose filament yarn capacity once fully operational.
Xinxiang Chemical Fiber Co LtdGovernment land repossession forces halt of its 31,200 t/yr northern viscose filament yarn line from Oct 2026, cutting capacity and 2026 revenue/profit.
Subsidiary Xinglu Technology's production is suspended as part of the northern line halt.
