Fluoride Action Network

Do-Fluoride Chemicals faces lawsuit

Source: CapitalVue (China) | July 21st, 2011
Industry type: Chemical Industry

Do-Fluoride Chemicals (002407), a producer of cryolite and aluminum fluoride chemicals, posted a 144.11 percent year-on-year increase in first half 2011 preliminary net profit to 59.56 million yuan, reports Securities Daily, citing a company filing.

According to the filing, the company is facing a lawsuit in which Germany’s CHENCO is suing the company for compensation of 214 million yuan, a sum that is two-times the net profit earned by the company in 2010 and in the first half of 2011, or the net profit earned by the company in the past 40 months.

The two parties had signed three technical cooperation agreements between 2005 and 2009.

According to CHENCO, Do-Fluoride had used seven aluminum fluoride and five hydrofluoric acid production lines without obtaining the licenses to do so.

In addition, Do-Fluoride has not paid the balance of 163,685 euros for the use of CHENCO’s lithium hexafluoroposphate techniques.

According to Do-Fluoride, two of the production lines in which CHENCO had provided technical services for, had flaws and had resulted in the company have to dismantle the equipment and incurring losses.

The technology provided by CHENCO failed to result in the production of any products which met the required standards, added Do-Fluoride.