Jiangsu Hua Chang Chemical (002274), a producer of basic chemicals, fine chemicals, and biochemicals, plans to raise 1.1 billion yuan from a private placement of 98 million shares at not less than 8.18 yuan per share, and the funds raised will be used to extend its industry chain, reports Shanghai Securities News, citing a company filing.

The company posted a 25.81 percent year-on-year increase in 2011 revenue to 4.12 billion yuan, while net profit surged 672.07 percent to 80.13 million yuan.

According to Hua Chang Chemical, it benefited from the economic recovery during the reporting period, and the price of calcined soda started to rise in the second quarter, before retreating in the fourth quarter.

The company had previously forecast a 630-680 percent year-on-year surge in 2011 net profit due to an industry-wide recovery.

The proceeds raised will be used to expand a concentrated nitric acid production facility, with annual production capacity of 150,000 tons, and for technology upgrading.

The concentrated nitric acid production facility will generate synergies and improve the supply of raw materials, according to the report.