By merging with [Lomon], Henan Billions will gain access to the company's integrated mining and processing operation. This integrated business structure was one of the cornerstones of Lomon's earlier success, guaranteeing a steady stream of high-quality raw materials and largely shielding the company from interruptions in supply or price rises. Lomon's production capacity of 300,000 tpa TiO[subscript]2 also allowed the company to gain cost advantages through economies of scale.
Insiders in China's TiO[subscript]2 industry say that Henan Billions' products, including its R699 TiO[subscript]2, are not regarded as high quality and the company depends heavily on its price advantages in the low- to mid-end section of the market.
With China's TiO[subscript]2 market still bloated with overcapacity and gross profit margins among China's listed TiO[subscript]2 producers averaging just 16% last year, Henan Billions' success in the export market has given the company a crucial strategic advantage.
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