Recently, the global titanium dioxide industry giant Teno Group announced a major strategic adjustment: after a comprehensive evaluation of its global production layout, it has decided to permanently close its titanium dioxide production facility in Fuzhou, China. This factory has been in a planned long-term shutdown state since October 1, 2025 and will no longer resume operations in the future. This decision not only marks a strategic retreat of a foreign-funded enterprise in the Chinese titanium dioxide market, but also reflects the structural challenges faced by specific sectors of China's manufacturing industry.
The market logic behind strategic retreat
Teno Group clearly stated in the announcement that the closure of the Fuzhou factory is based on a comprehensive consideration of multiple market factors, mainly including structural challenges such as the long-term market downturn caused by the continuous expansion of production capacity in China's titanium dioxide industry, weak domestic demand growth, overall overcapacity in the industry, and long-term low product prices.
This series of factors together constitute the insurmountable obstacles for Teno Group in the Chinese market. Since 2018, China's titanium dioxide production capacity has expanded at an average annual rate of 8%, while the demand growth rate during the same period was only half of the capacity expansion rate. The market pattern of oversupply has led to product prices hovering around the cost line for a long time, and the profit margin of enterprises has been extremely compressed.
Industry dilemma of overcapacity
The fate of the Teno Fuzhou factory is not an isolated case, but a microcosm of the overall predicament of China's titanium dioxide industry. According to statistics, by the end of 2025, the total production capacity of China's titanium dioxide industry has exceeded 5 million tons per year, while the actual market demand is only about 3.5 million tons. Nearly 30% of overcapacity has lowered the profitability of the entire industry.
This surplus situation is partly due to the support policies of local governments for heavy chemical projects in the past decade, as well as the strategic choices of industry enterprises blindly pursuing economies of scale. When macroeconomic growth slows down, especially when the adjustment of the real estate market leads to a decrease in demand for coatings, the supply-demand contradiction quickly becomes prominent.
Adjustment of foreign investment in China
The exit of Teno Group also reflects the reassessment of multinational chemical companies' strategies in the Chinese market. In the past two decades, foreign-funded chemical enterprises have occupied an important position in the high-end titanium dioxide market in China with their technological advantages and brand premiums. However, with the improvement of domestic enterprises' technological level and rapid expansion of production capacity, the market competition pattern has undergone fundamental changes.
Local enterprises not only surpass production capacity, but also continuously break through technological barriers in the field of mid to high end products. The trend of "domestic substitution" has become increasingly evident in recent years, which has resulted in a double squeeze on the technological advantages and market position of foreign-funded enterprises.
The crossroads of industry transformation
The closure of the Teno Fuzhou factory may become a catalyst for accelerating the integration of the titanium dioxide industry. Industry insiders analyze that against the backdrop of increasingly strict environmental standards and rising energy costs, the industry will usher in a new round of reshuffling. Small, technologically backward, and environmentally substandard enterprises will face greater survival pressure, while enterprises with scale advantages and technological leadership are expected to further expand their market share through industry integration.
At the same time, this incident has also prompted industry enterprises to rethink their development models. The growth path relying solely on capacity expansion is no longer sustainable, and the industry needs to transform towards high-end, differentiated, and green directions. The high-end product fields such as special titanium dioxide and functional titanium dioxide may become the new focus of competition in the future.
Reshaping the Global Titanium Dioxide Pattern
This decision by Teno Group is also part of its global production layout optimization. At the same time as closing the Fuzhou factory, the group is increasing investment in emerging production bases such as Vietnam and Australia. This adjustment in geographical layout reflects multinational corporations' reconsideration of global supply chain security, cost structure, and regional market characteristics.
From a global perspective, the production capacity of titanium dioxide is shifting from traditional production bases to regions with abundant resources and lower energy costs. This trend may reshape the global titanium dioxide industry in the coming years.
The Pains of Transformation and Future Paths
The decision of Teno Group to close its Fuzhou factory is a microcosm of the overcapacity problem in specific areas of China's manufacturing industry. This event not only reflects the cyclical adjustment of an industry, but also reveals that the traditional development model relying on scale expansion is facing bottlenecks.
For the Chinese titanium dioxide industry, the current difficulties are both challenges and opportunities. By accelerating industry integration, eliminating outdated production capacity, promoting technological innovation and product upgrading, the industry is expected to usher in a healthier development pattern after the pains. For local governments and industry enterprises, balancing short-term pains and long-term development in this transformation process will test the wisdom and determination of all parties involved.
In the coming years, the adjustment of China's titanium dioxide industry may continue. Only under the joint action of market forces and policy guidance, through survival of the fittest and transformation and upgrading, can the industry ultimately emerge from the shadow of overcapacity and achieve high-quality development. The closure of the Teno Fuzhou factory may be an important milestone in this long process.