[Resin Materials] Up 910%: the invisible giant behind Nongfu Spring and Coca-Cola
Shen Zhigang and his partner Xiao Haijun went around visiting big beverage companies and kept getting turned away — because competing on low price in the food industry just doesn't work. When customers asked more than once what their product's advantage was, they realized that for food-grade bottle chips, stability is the real hard threshold.
Bottle-grade PET, called "bottle chips" in the trade, basically means processing PTA and ethylene glycol into food-grade PET pellets and selling them to beverage plants, which then heat them, injection-mold them into preforms, and blow them into bottles. Sounds simple enough, but it's food grade — purity, stability, safety standards, and the big companies are almost brutally strict about it.
Two outsiders from the textile world, working with experts to repeatedly refine the production line, setting up an uncapped innovation bonus, and grinding away for a full two years, finally cracked open the doors of Nongfu Spring and Wahaha with stable, low-acetaldehyde bottle chips.
Right after that, Coca-Cola, C'estbon, Master Kong, Danone… one big group after another came calling. A little-known private factory in Zhejiang became the bottle-chip supplier for these beverage giants.
03
There used to be a saying: "China's water is made in Zhejiang." Wahaha, Nongfu Spring, and Master Kong all got their start rooted in Zhejiang.
The irony is that as the country's bottled-water heartland, Zhejiang had no large-scale bottle-chip capacity — beverage companies had to buy raw materials from other provinces. Wankai's Haining base filled that gap in the supply chain and quickly took over the PET market in the Jiangsu-Zhejiang area.
What's really impressive about Shen Zhigang is that he accepts his fate but doesn't accept defeat.
In 2024, the year they lost 300 million. Wankai had overcapacity, peers were slashing prices, and most people would have cut production and waited for the cycle to pass. Shen didn't pull back — while carrying the losses, he built a 600,000-ton ethylene glycol project to move upstream into raw materials and squeeze costs down another notch.
PET bottle chips are a bulk chemical product — you earn only a thin processing spread, with almost no brand premium. Since it's a low-margin grind, then make costs lower than anyone else can.
He set his sights on the southwest market and placed his bet in Fuling, Chongqing. Natural gas costs there are far lower than in Zhejiang, and it can reach water plants in Sichuan, Chongqing, Yunnan, and Guizhou. After the Fuling base was built, Wankai's market share in the Sichuan-Chongqing region hit 80% — four out of every five beverage bottles there use raw material from Wankai.
With two major bases, one east and one west, Wankai built up its domestic production foundation, and at the same time ships out via the Yangtze River to sell to over a hundred countries, with overseas revenue close to 40%. Today, China's PET capacity accounts for nearly half the world's — a true "bottle-chip factory to the world."
A set of figures shows China's weight in this industry: in 2025, domestic bottle-grade PET capacity reached 21.47 million tons, about 49% of global capacity; output was 17.53 million tons, 52% of the world's; exports were 6.45 million tons, about 50% of global trade volume.
In 2023, the company's capacity was 3 million tons, ranking fourth globally and second domestically, with total output at one point first in the country and second in the world.
It looks glorious, but in reality this is a "big volume, thin margin" business.
04
Upstream of PET are PTA and ethylene glycol, and the source of PTA is crude oil. When oil prices twitch, the whole chain goes on a roller coaster. Upstream raw materials spike, downstream beverage customers are hard-pressed to accept price hikes at the same time, and the processing fee in the middle gets flattened.
And bottle chips are a highly standardized bulk industrial product — the pellets from different makers perform similarly, and big customers like Nongfu Spring and Coca-Cola keep comparing prices when they buy — so it's hard to sell the product at any extra premium.
Comments
0