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    Leading the healthy development of germanium industry
    ----Interview with Bao Wendong, the chairman of Yunnan Lincang Xinyuan Germanium Industrial Co., Ltd.
    Yunnan Germanium (stock code: 002428) is China’s first and Asia’s largest manufacturer and supplier of germanium products. It is the only germanium enterprise in China that owns an integrated industrial chain covering the mining, pyrometallurgy enrichment, hydrometallurgy purification, zone-melting refining, as well as the further processing and R&D of germanium. Located in Lincang City, Yunnan Province, Yunnan Germanium has 10 subsidiaries. Its main products include germanium dioxide, zone-refined germanium ingot, infrared germanium monocrystalline, germanium optical elements(Germanium blanks, germanium polished blanks, germanium lens), infrared optics germanium lens, photovoltaic germanium tetrachloride and gallium arsenide single crystal wafer, which are mainly sold in countries and regions such as China, Europe, Japan and the United States.

    Asian Metal: Hello, Mr. Bao! Thank you very much for this interview and please give a brief introduction to the main business of your company.

    Yunnan Germanium (Yunnan Lincang Xinyuan Germanium Industrial Co., Ltd) is Asia’s largest manufacturer and supplier of germanium product. It is the only leading germanium enterprise in China that owns an integrated industrial chain covering the mining, deep processing and R&D of germanium, also the Chinese germanium enterprise listed in the Main-Board Market (stock code: 002428). Meanwhile, the company is a national high-tech enterprise, a leading enterprise in Yunnan province.
    Based on the largest germanium ore reserves in China, Yunnan Germanium is a high-tech enterprise with the most complete germanium industrial chain with subsidiaries in Yunnan Lincang, Kunming and Wuhan.
    At present, we have made a breakthrough in key techniques in germanium-represented new material and emerging industry and established five pillar industries including high purity germanium materials, infrared photoelectric products, germanium substrate and III-V semiconductor substrate, photovoltaic germanium tetrachloride and germanium metal recycling.
    Products include high purity germanium dioxide, organic germanium, zone-refined germanium ingot, infrared germanium optical elements, complete machine of infrared thermal imager, germanium single crystal wafer for solar battery use, efficient concentrating solar cell module, photovoltaic germanium tetrachloride, high purity gallium arsenide single crystal wafer, indium phosphide and other ten categories, which are exported to the United States, Europe, Japan and other 16 countries and regions and germanium product sales ranks first in Asia.
    This is the brief introduction of our company.

    Asian Metal: Thank you for your introduction to the company. Would you please give us a detail introduction to yourself?

    I have been engaged in research and operation management of germanium metal smelting and related germanium products for long time, accumulating a wealth of practical experience in germanium industry. I have participated in drafting a number of national and industry standards for germanium and currently hold the position of Party Secretary and chairman of Yunnan Germanium, also the CPPCC member of Yunnan province.

    Asian Metal: Germanium prices have been hovering at low level in China from Q1-Q3 of 2016 and gradually rebounded from the bottom from Q4. Most producers have reported losses currently and what’s the balance of sheet of your company?

    As what you said, most germanium metal producers in China are in losses and so are we.

    Asian Metal: Chinese germanium metal prices have been on increase from Q4 2016 till now. In your opinion, what’s the reason behind the upward momentum and what do you think of the future market?

    Chinese germanium metal prices have been moving up steadily from Q4 2016 till this year and I believe the increase can be attributed to the several main factors below:
    Firstly, most germanium producers suffered losses last year when the whole market was sluggish and thus most of them tried to turn losses into profit. Actually, it is impossible for any industry to survive and develop when facing up with consistent losses. In addition, major suppliers consecutively reduced output to control the market supply. As far as I know, some smaller enterprises were struggling in normal operation due to long-term losses and some even withdrew from the industry, which led to an decrease in market supply to some degree.
    Secondly, raw material of germanium reduced. Environmental requirement is tightening in China, leading to tighter supply of raw material based on decreasing output from germanium concentrate producers. Production enterprises of germanium raw material have been in long-term losses.
    Thirdly, the demand for germanium products is improving with more downstream applications both at home and abroad, especially the increase in new germanium-related products as domestic high-tech industries and new germanium related products are in process of development and application, which will push up germanium prices as a result.
    As for the future market, germanium prices are moving up steadily on the whole in the long run. We believed that the market will move upwards in the future with prices rationally returning to the right track, leading the healthy and sustainable development in the whole germanium industry.

    Asian Metal: I believed that Yunnan Germanium will also lead the healthy development of the industry as the leading enterprise in this industry. Environmental protection has been a hot topic in China in recent years and market participants reflected tight supply resulted from environmental factor. What’s your opinion on this issue?

    In the past two years, we have seen tightening national environmental governance in China and capital investment in environmental protection is increasing, resulting in rising production cost for enterprises. Some small and medium-sized enterprises had to cut or suspend production as they are substandard in environmental requirement, which also led a decrease in germanium raw material supply.
    I think that raw material supply will decrease further as the country is stricter in environmental requirements, which is an irreversible trend in the future. As for smelting industry, enterprises should be powerful both in finance and technology in coping with higher environmental requirement and technological requirement. Enterprises should lay more focuses on environmental protection and investment and meanwhile they should also maintain profitability to achieve healthy and sustainable development.

    Asian Metal: What do you think of the demand for germanium in 2017? Where is the growth point?

    Downstream industry of germanium develops steadily and the market demand will be on steady growth with the breakthrough in new products and technologies of germanium.
    Meanwhile, affected by impacts and encourage of national industrial policies, some downstream industries saw substantial growth, such as optical fiber industry. As far as I know, the demand for germanium is skyrocketing in China at present, which was limited technologically in optical fiber rod with most relying on imports based on a small proportion of domestic material. Presently, China’s independent technology has achieved or even surpassed the international level and meanwhile strategies of "Broadband China", “Fiber-to-the-Home”, “5G”, etc. have been promoted vigorously in China. As a result, most Chinese optical fiber production enterprises are expanding production.
    At the same time, industries of infrared germanium and germanium solar cells also grow steadily with stable demand and orders from these industries are vigorous. In addition, military demand for germanium is also increasing with military and civilian integration and developing national defense construction.
    Furthermore, the demand for germanium in aspects of special gas for semiconductor use, silicon-germanium alloy and compound crystals for medical equipment is increasing year by year.

    Asian Metal: What’s your opinion on national reserve of germanium?

    As for the national reserve, I will make no comments. National reserve is a strategic action led by the country and cooperated by enterprises. I believe China will formulate related plan for national reserve based on comprehensive considerations from the requirement of overall national defense, the demand from the country itself and industrial development at different stages. What we can do is to actively provide cooperation to the country when needed and help to achieve security for national strategic resources.

    Asian Metal: Thank you very much for sharing your views and also thanks for supports to Asian Metal from Yunnan Germanium. Welcome to attend the 10th World Indium & Germanium & Gallium Forum in 2017 and wish your business thriving!

    We also hope to keep close communication with your company on the market, leading the healthy development of the industry and meanwhile making a small contribution to the country and germanium industry.
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