China’s Lomon Billions expands into South America for titanium ore

Publish time:9/11/2017 12:00:00 AM      Source: CCM
Information collection and data processing:  CCM     For more information, please contact us

Chinese leading TiO2 giant Lomon Billions is increasing international investments by signing a MoU with Brazils’s MSE, the owner of a huge titanium ore mining company. As the global TiO2 market is prospering, Lomon Billions is ensuring sufficient supply for further expansion and strengthening its international role.


According to market intelligence firm CCM, the largest TiO2 enterprise in China, and fourth largest producer in the world, Lomon Billions Group, has announced recently to strengthen its cooperation with Brazil’s Mineracao Santa Elina Group (MSE). The deal is about a large titanium ore mining enterprise operating in Brazil and Uruguay and owned by MSE. According to the deal, which is drafted in a Memorandum of Understanding. 

As the MoU is just the draft of the basic deal for the two companies, the further process will include the financial development of the mining company by Lomon Billions, which in return allows the TiO2 enterprise to buy the mined titanium ore at a lower price than the market. This provides the company with a huge advantage and the highly needed independence from world market supply and fluctuating prices.  

The titanium ore resources of the company are estimated to succeed 1.5 billion tonnes, according to CCM’s research. This amount of raw materials enables Lomon Billions to acquire sufficient supply for the titanium containing products at least for the coming 20 years.  

Lomon Billions is able to achieve two major goals with the deal ahead, strengthening its position in the world market as an international player for TiO2. On the one hand, the cooperation will allow having sufficient supply of titanium ore for future expansion plans, on the other hand, the international partnership is demonstrated Lomon Billions engagement in the global competition.  

As the company is heading towards an aggressive expansion strategy, ensuring the supply of raw materials is vital for the production lines. Especially the chloride process of Tio2 is going to be expanded enormously in 2017 and 2018. Supported by national policies, chloride process TiO2 is going to be a vital part of the production variety for Lomon Billions, for which Chinese domestic titanium ore is not suitable. Hence, exported titanium ore is the only source for the enterprise, and to be independent of world market instabilities, the investment into MSE offers a great opportunity for ensuring a steady supply to beneficial conditions.  

As the market leader in domestic TiO2 enterprises in China, Lomon Billions is now heading towards global competitors to get some share in the steadily growing global TiO2 market. After revealing a huge financial success in the first half of 2017, the company is counting on foreign officials to guide the way for success in the international market.  

According to the financial statement of Lomon Billions for the first half year in 2017, the company has achieved an increase in net profit of USD191 million to USD206 million. This development represents a growth of about 1,800% compared to the same fiscal period of 2016. Previous estimations had predicted the net profit at an average of USD170 million. Hence, the enterprise exceeded expectations significantly and strengthens its place as one of the world largest TiO2 manufacturer and supplier.   

According to market intelligence firm CCM, the reason for the surprisingly high performance can be found in the high price of TiO2 in this period as well as financial statement consolidations the enterprise handled with its subsidiaries.  

What’s more, industry insiders expect further consolidation in the European TiO2 and ink market, where one of the major drivers would be the expansions by Chinese operators. There has been speculation among the analysts, that Lomon Billions wants a stronger presence in Europe, a major consumption region of TiO2. Europe held the second largest share of the TiO2 market in 2015, accounting for over 25% of the global volume share and will witness growth on account of rising need for cosmetic products in Germany, Italy, France and UK. Increasing disposable income along with growing consumption of paints & coatings particularly in the automotive and construction industry will augment growth in Asia Pacific. Furthermore, surging use of cosmetic products in Latin America and the Middle East will increase consumption of titanium dioxide over the next decade.  

Further acquisitions

China’s TiO2 giant Lomon Billions has announced earlier to purchase 100% stocks of titanium concentrate processor and trader Panzhihua Ruierxin. This move shall ensure sufficient supply for raw materials like ilmenite and further improve production output and costs.  

The main purpose behind the acquisition lays in the insurance for sufficient raw materials like ilmenite, which is facing a tight supply currently. The concept is written down in the Titanium Ore Purchase Agreement of both companies, which regulates the purchase of 480,000 tonnes of ilmenite by Lomon Billions in the next three years. In addition to this agreement, Panzhihua Ruierxin will also guarantee the best monthly price for Lomon Billions, orientated on the price for the other customers.  

About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.  

Do you want to find out more about the TiO2 market in China? Try our Newsletters and Industrial Reports or join our professional online platform today and get insights in Reports, Newsletter, and Market Data at one place.

For more trade information of TiO2, including Import and Export analysis as well as Manufacturer to Buyer Tracking, contact our experts in trade analysis to get your answers today.  

People who read this article also read what the article