“China’s titanium dioxide production capacity last year was nearly 4 million tons, and this year, with new capacity coming online, it will total 6.5 million tons. What does it mean when an industry’s capacity exceeds demand by 50%? I think that speaks for itself,” said Xie Bingkun. On April 14, the chairman of Kunchai Technology (SH603826, stock price: RMB 56.33, market capitalization: RMB 26.362 billion) ...

With waves surging and thousands of sails racing, now is the time to row forward with determination. At Fuzhou’s Jiangyin Port in spring, ships laden with ore arrive and are dispatched into Kunchai Technology’s production facilities, marking the start of the world’s first titanium dioxide production process based on extraction. This milestone represents a monumental innovation achieved after 13 years of intensive R&D and an investment exceeding 3 billion yuan.

“From zero to one, the extraction‑based titanium dioxide chlorination process has upended more than a century of conventional industry practices. It represents Kuncai Technology’s bold commitment to its responsibilities in this era, its adherence to the new development philosophy, and its proactive pursuit of a new path toward high‑quality growth—while also serving as the fundamental foundation for our ambition to carve out blue‑ocean opportunities in what was once a red‑ocean market,” said Xie Bingkun, Chairman of Kuncai Technology, with confidence, to visiting media reporters on the occasion of the company’s sixth anniversary of going public.

 

Break through barriers and be a “lone warrior.”

 

As an important inorganic chemical pigment, titanium dioxide is widely used in building materials, coatings, inks, plastics, ceramics, papermaking, and textiles. At present, China is a major producer of titanium dioxide, yet its product quality and brand reputation still lag behind. Prior to Kuncai Technology’s development of the hydrochloric acid‑extraction process for producing titanium dioxide, the two predominant production methods were the sulfuric acid process and the chloride process. The sulfuric acid process primarily serves the mid‑to‑low‑end market, with production capacity concentrated mainly in China and accounting for approximately 90% of global output. By contrast, Europe and North America rely predominantly on the chloride process, where high‑end titanium dioxide accounts for roughly 90% of total production.

 

The sulfuric acid process has a long history and is well‑established, but it generates substantial amounts of “three wastes,” posing a significant pollution risk. As environmental regulations have grown increasingly stringent, the United States shut down its last domestic sulfuric‑acid‑based titanium dioxide plant as early as 2006. Meanwhile, with the growth of the national economy and rising living standards, demand for high‑end titanium dioxide applications continues to expand, yet the sulfuric acid process falls short in terms of weatherability and purity. This has resulted in an insufficient supply of high‑end capacity in China, necessitating annual imports of premium‑grade titanium dioxide to meet domestic needs.

 

The chlorination process was introduced relatively late, but it features a simple process flow, high production capacity, and low environmental impact, making it widely adopted abroad. Although China has encouraged and promoted the chlorination process at the national level since 2005, its development has been rather slow due to factors such as shortages of key raw materials—namely high‑titanium slag and synthetic rutile—and the monopoly of advanced technologies by a handful of international firms.

 

“Others sell it for 36,000, while you’re pricing yours at 16,000. Producing titanium dioxide in China requires the same resources, yet we can’t even fetch half their price—this is simply unacceptable. After all, it’s not a luxury item or a cosmetic; it’s a bulk commodity. We shouldn’t be forced to sell it cheaply to others just because we can’t achieve high quality. That’s truly heartbreaking.” How to help Chinese titanium dioxide producers break through technological barriers, gain equal footing in dialogue with international industry giants, strengthen their national enterprises, and earn the respect of the global market has become Xie Bingkun’s unwavering obsession.

Xie Bingkun, Chairman of Kunchai Technology

 

Xie Bingkun’s self‑reliance is by no means unfounded arrogance. Over 24 years of relentless effort, the company he founded, Kuncai Technology, has grown from a modest pearl‑luster pigment manufacturer with just 2,000 square meters of factory space into China’s first pearl‑luster pigment producer listed on the A‑share market. Today, Kuncai Technology stands as the global leader in pearl‑luster pigment production, commanding approximately 75% of the domestic market and 45% of the worldwide market. As the only enterprise worldwide to possess a complete production process and industrial chain for pearl‑luster pigments based on synthetic mica, its products serve dozens of industries, while its strategic partners include numerous Fortune Global 500 companies such as PPG, Procter & Gamble, Unilever, and Shiseido.

 

In Xie Bingkun’s view, as an entrepreneur, one should adopt a long-term perspective when planning ahead. “If we were to start R&D on the chloride process from scratch, we would end up in the same position as other titanium dioxide producers in China—without any distinct advantages—and it would be difficult to achieve superior quality or cost efficiency through this route. That’s why Kunchai decided to take a bold gamble and pursue a new approach: the extraction method, which no one else in the world has yet used, to produce titanium dioxide via the chloride process.”

 

It was precisely out of this awareness and determination that Xie Bingkun once again led Kuncai Technology to make a fresh start, “resetting the clock and leaping forward,” embarking on a challenging journey of independent research and development.

 

Innovation-driven, resilient perseverance

 

As the most upstream stage in the industry—research and development of foundational raw materials—the R&D process is both time‑intensive and capital‑heavy, demanding immense effort. By taking on an even more complex and challenging path, Xie Bingkun relies on sheer determination and an unwavering commitment to innovation.

 

In the early stages, Kunchai once paid a substantial design fee and commissioned a renowned domestic chemical engineering design institute to undertake the project. However, due to numerous challenges, the institute ultimately refunded the fee, and the effort came to nothing. “We also consulted many universities, but none of them had relevant research papers or readily applicable patents and literature in this area. As far as I know today, fewer than 500 PhDs worldwide have ever worked on this particular research topic.”

 

Having hit dead ends everywhere, Xie Bingkun decided to go into business for himself.

 

“Kuncai is born with the DNA to become world‑class, driven by R&D and innovation, and firmly rooted in the market. That’s why our pearlescent pigments have grown to be the largest globally—and command premium pricing. Kuncai possesses an innate spirit of innovation, spanning technology, processes, management, business models, and sales. We are constantly exploring new avenues; after all, innovation is the sole pathway for any enterprise to transform and upgrade.”

 

To master the industry’s most advanced manufacturing processes, the company established a specialized technical team led by experts recruited through the “Thousand Talents Program.” Numerous PhDs and masters serve as project leaders and research group heads, and the company has also set a precedent as the first private Chinese chemical enterprise to hire foreign PhDs. Engineer Xie Bingkun, in particular, spends day and night on the shop floor, working alongside his team to draft blueprints, conduct experiments, formulate strategies, and devise solutions. From tackling technical challenges and conducting pilot-scale validation to scaling up to small‑batch production, every stage has been fraught with setbacks and hardships.

 

“When we first embarked on this project, we knew it would be challenging, but only in the end did we truly grasp just how difficult it was,” Xie Bingkun recalled. The myriad challenges remain vivid in his memory: constantly pushing beyond the limits of our understanding, of manufacturing processes, and of materials…

 

Massive investments, countless hours of hard work, and unexpected setbacks—under normal circumstances, most people would give up. But Xie Bingkun would not. As a native of Wenzhou, he has traversed mountains and rivers, exhausted every possible strategy, spoken his mind at length, and endured untold hardships—the “Four Thousand” spirit that defines him and his enterprise has become deeply ingrained in their very DNA.

 

Accordingly, the company redoubled its efforts and pressed ahead with R&D, establishing another subsidiary, Zhengtai New Materials, which began construction on titanium dioxide and iron oxide projects in the second half of 2019. Finally, in 2022, Zhengtai New Materials successfully commenced production. At present, the plant has commissioned two production lines, with an annual capacity of 200,000 tons, and its products meet or exceed international industry standards. This year, Zhengtai New Materials aims to bring five additional production lines online, boosting its total capacity to 500,000 tons. Over the course of the 14th Five-Year Plan period, the project is slated to reach an overall scale of approximately 1.5 million tons.

The hydrochloric acid extraction process for producing titanium dioxide boasts numerous advantages, including stability, low energy consumption, reduced emissions, recyclability, sustainability, and environmental safety. Even with significantly lower raw-material quality requirements than conventional methods, this approach—featuring extraction‑based impurity removal and calcination—yields a final product whose purity can rival or even surpass that of traditional processes. It also offers superior environmental performance: the intermediate product, titanium oxychloride, hydrolyzes to form rutile‑type titanium dioxide, thereby saving substantial amounts of wash water; the lower calcination temperature further cuts energy use and emissions. Moreover, the hydrochloric acid used in the process is recyclable, and the byproduct ferrous chloride can be utilized to produce iron‑based pigments. Xie Bingkun and Kuncan Technology have once again reached the pinnacle of technological advancement.

 

“This project spanned 13 years and cost over 3 billion yuan. It marked a pivotal turning point in my life and represented the most arduous, extraordinary chapter of my career. Few entrepreneurs can endure more than a decade of relentless, round-the-clock effort; even fewer can shoulder such massive R&D expenditures or bear the risks that come with failure. I believe this is a true act of sacrifice.” Xie Bingkun firmly believes that to see a venture through to success, no amount of technology or capability can surpass an entrepreneur’s unwavering resolve and perseverance—qualities that embody the invaluable spirit of entrepreneurship. “If an entrepreneur merely rests on the figures in the income statement, touting past achievements, then he is nothing more than a boss—not a true entrepreneur at all.”

 

Technological disruption creates blue oceans.

 

The journey to gaining technological leadership is arduous, yet the rewards are substantial. It is precisely thanks to Xie Bingkun’s keen market insights, unwavering dedication to technology, and holistic understanding of the industry that Kunchai Technology has carved out a broader path for its growth.

 

In the market landscape, the global inorganic pigments market has reached US$22 billion, with the mainstream titanium dioxide and iron oxide segments accounting for approximately US$17 billion and US$2.2 billion, respectively. The combined mid-to-high-end market for these two segments is close to RMB 56 billion. A market opportunity poised for exponential growth has thus emerged before Kunchai Technology.

 

In terms of pricing and costs, it is reported that Kuncai Technology’s extraction‑based production process costs approximately RMB 15,000 per ton. By deducting the RMB 6,000 associated with iron oxide, the cost can be kept below RMB 9,000, giving it a significant advantage over competing products on the market.

In terms of full‑chain industrial layout, Xie Bingkun recognized years ago the industry’s challenges regarding raw‑material supply security and price sensitivity. After years of painstaking efforts to build a comprehensive, vertically integrated business portfolio, the company is already beginning to see tangible results. Titanium and iron—accounting for roughly 40% of direct production costs—are largely sourced from Fushi Company, a subsidiary of Kunchai Technology. Moreover, titanium tetrachloride and ferric chloride, whose prices soared dramatically over the past two years, are byproducts that the company can now produce in‑house, ensuring self‑sufficiency. The company also plans to sign an agreement with the Panzhihua Municipal Government in Sichuan to develop titanium‑iron ore resources and establish deep‑processing projects, thereby securing a sustainable supply of iron concentrate feedstock. It is clear that Xie Bingkun has constructed for Kunchai Technology a three‑pronged competitive moat: a market‑driven moat anchored in its transition to high‑end products; a cost‑based moat leveraging economies of scale; and a supply‑chain moat built on the advantages of its fully integrated industrial footprint.

 

“This is a red‑ocean industry, yet we’ve carved out a blue‑ocean space. To date, we haven’t turned a profit on the products themselves; our real value comes from technological innovation,” says Xie Bingkun, who has already recognized the vast opportunities created by technological disruption.

 

As high-quality development continues to advance, the growing demand for inorganic materials will create new opportunities for enterprises. Under the leadership of Xie Bingkun, Kunchai will relentlessly pursue innovation, continuously upgrade its capabilities, and optimize its operations, writing an even more brilliant chapter in the development of China’s national enterprises.