HZ info, Oriental Yuhong recently announced two major overseas strategic moves: its wholly-owned subsidiary, Oriental Yuhong Brazil Co., Ltd., plans to acquire a 60% stake in Novakem, a leading Brazilian cement additives and concrete admixtures company, for approximately BRL 108 million (about RMB 144 million) using internal funds. Simultaneously, the company has broken ground on its production, R&D, and logistics base in Mexico. This dual strategy of "acquisition + new construction" marks a significant acceleration in Oriental Yuhong's global strategic layout, demonstrating its firm resolve to navigate industry cycles and realize its vision of becoming "the most valuable enterprise in the global building materials industry."

In recent years, downward pressure in China's domestic real estate market has intensified. In 2024, real estate development investment fell by 9.6% year-on-year, with new construction starts declining sharply. Demand for building materials such as waterproofing and coatings continues to shrink, leading to intensified "inward-looking competition" within the industry and gradually saturated growth prospects in the domestic market.

"Without a solid domestic market, overseas strategy would be like 'water without a source, a tree without roots,'" stated Li Weiguo, Chairman of Oriental Yuhong, in his article "The Warrior Devours the Bull", revealing the core logic behind the company's globalization. In his view, internationalization is not an escape from domestic competition but a natural extension of matured domestic capabilities. Zhang Shuo, Overseas Product Director of Oriental Yuhong, told HZ info that after thirty years of development, the company has built a comprehensive product matrix covering waterproofing, coatings, mortar powders, and more. With 68 production and R&D bases worldwide and over 200 internationally advanced production lines, the accumulated technological expertise, production capacity, and operational experience form a solid foundation for its overseas expansion.

Meanwhile, overseas markets present substantial growth potential. According to Statista, the home and building materials retail market in South America is projected to reach USD 90.61 billion by 2025, with Brazil leading the region at USD 30.67 billion. As Latin America's largest economy, Brazil offers political stability, a sound legal system, and significant development potential. Mexico, leveraging its strategic location connecting North and South America, serves as a pivotal hub for radiating into both markets. In recent years, Chinese investment in Brazil has continued to grow, highlighting broad prospects for bilateral economic and trade cooperation. Against this backdrop, Oriental Yuhong's increased focus on Latin America represents both an active move to counter domestic market pressures and strategic foresight to capture opportunities in emerging global markets.

Oriental Yuhong's globalization journey began two decades ago, evolving gradually from product exports to local production, and from trade cooperation to mergers and acquisitions. In 2004, the company established an International Trade Department, taking its first steps overseas. It subsequently set up overseas subsidiaries and offices, building a global business network.

In recent years, the pace of its overseas expansion has accelerated, forming a strategic model driven by the "three pillars" of trade, investment, and mergers & acquisitions. In August 2024, construction began on its production, R&D, and logistics base in Houston, USA, focusing on high-end building material demand in North America. In January 2025, its Malaysian base completed its first trial production, marking the company's first overseas factory operational, covering water-based coatings, mortar, and other products. In April of the same year, construction advanced on Tiandingfeng's Middle East production base in Saudi Arabia, targeting infrastructure opportunities in the region.

M&A activities have also seen multi-point breakthroughs. In March of this year, Oriental Yuhong completed the acquisition of Hong Kong Wanchang Hardware and Kangbao Hong Kong, using Hong Kong as a lever to expand into Southeast Asia. In October, it acquired a 100% stake in Chile's leading building materials retailer, Construmart S.A., for RMB 880 million. Subsequently, Oriental Yuhong's 32nd store in Chile, San Pedro, opened grandly, marking a substantive step in its localized operations.

Regarding the Brazil acquisition, Oriental Yuhong stated that the move aims to leverage its core positioning as a building materials system service provider. By integrating Novakem's comprehensive strengths in admixture products, the company will establish a foothold in Brazil to radiate across Latin America and enhance its overseas business layout. Founded in 2013, Novakem is a leading supplier of cement additives and concrete admixtures in Brazil. It has built an excellent brand reputation locally through its advanced technology and stable product quality. Its experienced and highly professional management team provides robust support for stable operations. Through this acquisition, Oriental Yuhong will combine its core capabilities in technology R&D, product matrix expansion, channel operations, and supply chain integration with Novakem to achieve efficient synergy and complementary advantages in technology, products, channels, and supply chains.

The groundbreaking of the Mexico production, R&D, and logistics base fills the production capacity gap at the junction of North and Latin America. Located in the QUMA Industrial Park in Tula City, the 27,000-square-meter base will be constructed in two phases. The first phase involves building production lines with an annual capacity of 100,000 tons of mortar powder and 20,000 tons of water-based coatings, along with supporting warehousing and logistics centers. Expected to commence operations in 2026, this phase will rapidly establish local supply capabilities. The second phase will expand admixture and coil production lines, gradually building a multi-functional, integrated regional production and service hub. Leveraging Tula's strategic location and the industrial park's comprehensive facilities, the base will enable localized production and service, catering to diverse needs in residential, commercial real estate, and infrastructure construction. At the groundbreaking ceremony, Tula Mayor Yocelyn Tovar stated that Oriental Yuhong's presence would bring advanced technology and management experience, promote employment and industrial upgrading, and that the municipal government would fully support the base's construction and operation.