Expansion is also a strength of private chemical companies

Since the beginning of this year, due to the stimulation of the export volume and price of caustic soda in Japan caused by the earthquake in Japan, China's caustic soda industry has gained momentum in its new round of expansion. The picture shows that a private chlor-alkali enterprise in Inner Mongolia is building a new caustic soda project. (CCIN reporter Hu Yuejun)

Sinochem New Network News “A big pot rushed”, said that when the private chemical companies set up factories in the situation. However, if the current impression of private enterprises still stays at this level, then you will surely be eye-opener. CCIN reporters recently conducted an interview on the development of private chemical companies, which deeply felt.


Expansion of production has also become a strength. "The energy of private enterprises is really too great!" said a person in charge of China Capital Securities Co., Ltd. with emotions, taking PTA (pure terephthalic acid) industry as an example, due to low barriers to entry, new The production capacity is often very large. Such as the private enterprise Zhejiang Hengyi Group in a short period of time, PTA production capacity reached 5.65 million tons. This figure is equivalent to the national production in 2004. Large-scale expansion is still underway, claiming to expand to 10 million tons within three years. what is this concept? Equivalent to the current national PTA production. After reaching 10 million tons, it will be expanded and it will have to be expanded to 15 million tons. "I used to suspect that private enterprises can't do it? But now there is no doubt. Because the company began to get involved in PTA since 2000, but in just a few years, the capacity reached more than 5 million tons, becoming One of the world's largest PTA producers."

It is understood that the Zhejiang Hengyi Group has frequently been generous this year. The company and Sinopec subsidiary Baling Petrochemical jointly invested 3.6 billion yuan at a ratio of 50%:50% to build the world’s largest single-line production capacity of 200,000 tons of caprolactam per annum in Zhejiang Xiaoshan, which will be the largest capacity domestic caprolactam plant after completion. . The company also plans to build a petrochemical project in Brunei with a total investment of US$6 billion, mainly producing paraxylene (PX), ethylene and benzene and other chemical raw materials.

Private enterprises in other chemical fields continue to make great moves. Including industries such as caustic soda and titanium dioxide, which have excess capacity, and strategic emerging industries such as carbon fiber and lithium batteries.

Titanium dioxide is doing well this year. As the international titanium dioxide market is in short supply, China’s export volume has soared, and the price of titanium dioxide has increased significantly, resulting in a higher overall industry profit margin. Under such circumstances, domestic private enterprises have high investment enthusiasm and have invested in the construction of titanium dioxide plants. According to statistics, the current production capacity of titanium dioxide to be built and under construction is more than 2 million tons.

According to the announcement of Titanium Dioxide, a listed company of titanium dioxide, the company's titanium dioxide increased from 54700 tons in 2008 to 102,000 tons in 2010, and its output jumped to the top three in the country. The company plans to reach 300,000 tons of capacity by the end of the “Twelfth Five-Year Plan” period, and the production capacity will be three times the current capacity.

Sichuan Longxi Group, which currently has the largest production capacity of titanium dioxide in China, pledged to build the largest titanium dioxide production base in the world. The company announced that it will invest 16 billion yuan to build an ultra-large* phosphorus-titanium integrated project with an annual output of 3 million tons of phosphate, 6 million tons of **, and 600,000 tons of titanium dioxide.

Sufficient caustic soda production capacity was surprisingly good this year. The main reason is that due to the shortage of international demand due to the tsunami suspension of production of Japan's caustic soda plant, the caustic soda market in China has become so popular that it has driven new projects. Private enterprises in Inner Mongolia Wuhai Zhonglian Chemical Co., Ltd. said it will invest 15 billion yuan to build an annual output of 1.2 million tons of PVC, 2.4 million tons of calcium carbide, and 1 million tons of caustic soda projects.

In strategic emerging industries, polysilicon-style bedding investments were made that year.

As a sub-sector of strategic new industries, carbon fiber has poured into many private enterprises. For example, Dalian Xingke Carbon Fiber Co., Ltd. is currently constructing a carbon fiber project with an annual output of 10,000 tons in Ordos. It is understood that the Erdos project is only one point in the carbon fiber industry layout of the company. The company must also build at least four carbon fiber bases with an annual output of 10,000 tons in Dalian, Baotou, Sanhe and Baoding. At present, the annual domestic demand is only about 8,000 tons. What is even more worrying is that China's carbon-made fibers are concentrated in general, basic, and low-grade varieties, and it is difficult to compete with foreign products in terms of product quality, performance, and cost.

Lithium hexafluorophosphate is the internal electrolyte of lithium batteries, and the technical threshold is extremely high. However, investment from private enterprises is also very hot. The company plans to invest 80.50 million yuan to build an annual output of 400 tons of lithium hexafluorophosphate project; Jiangsu Guotai's subsidiary, Yayuan Gaoxin, plans to build a new annual output of 300 tons of lithium hexafluorophosphate product with a total investment of 83.30 million yuan; the company will invest 1.2945 billion yuan. The 200-ton lithium hexafluorophosphate project was successfully piloted. The company also plans to spend another 556 million yuan to invest in the lithium industry, including 2,000 tons of lithium hexafluorophosphate and downstream electrolyte and lithium batteries.

“We were surprised to see these investments.” The chairman of a state-owned company in Jiangsu said, “The technology threshold for lithium hexafluorophosphate is high, and the technology is still monopolized by companies in Japan and South Korea. Some of the domestic investment companies have not yet passed the technology. Some do not even have any technical background. Even if they are made in the future, it will be a problem whether the products can be used or not.


Expanding Production to Adapt to "National Conditions"


Why can private enterprises expand their energy so fast? The CCIN reporter found that there are four main reasons.

First, the original capital accumulation of private enterprises has reached a certain level. A CEO of a private chemical company in Zhejiang said that private chemical companies can grow quickly, and that the spirit of hard-working employees can not be separated. At the beginning of the reform and opening up, when SOE employees were still immersed in “iron rice bowls” and “waiting for more,” when leisure time was playing mahjong and dumping poker, some people, especially those in Jiangsu and Zhejiang provinces, had used cotton, grind tofu and make clothes. , repairing shoes, matching keys, and other "underclasswork" that others despise, quietly completed the primitive accumulation of capital. Today's chemical company CEOs are some of the cotton ranch who were walking around the streets. After decades of hard work, the original accumulation of private enterprises has reached a certain degree.

Second, the thresholds in the low-end and middle-end sectors of the petrochemical industry are not high, but the previous rate of return is still relatively good. A CEO of a private company stated that the chemical industry has low thresholds in the middle and low-end sectors, and there are no technical barriers to entry, so that companies can be large at one stroke and they can achieve leapfrog development and continue to expand their platforms. "Now we will retreat if we don't enter. The slow pace of progress is also retreat. The project will not be put into production. The second project will start. The third project will be planned. Only in this way can we keep up with the pace of other companies. Opportunity to do some diversified and more profitable business,” he said.

Liu Yingqiu, director of the Private Economic Research Center of the Chinese Academy of Social Sciences, pointed out that the low-end investment in the chemical industry indicates that the chemical industry used to be a relatively high-yield industry. Even if it is a medium- and low-end product, the price is too high, causing companies to flock. to. This is also a result of market orientation.

Third, the lack of innovation power can only work hard to expand energy. Liu Xintian, editor-in-chief of the China Chemical Network Information Center, told CCIN reporters that China’s private-owned enterprises’ expansion is fast, not surprising at all. When the country eliminated the first round of Shandong refining 10 years ago, a company with a capacity of less than 500,000 tons must be shut down. At that time, many refineries were not eligible, and some had only 50,000 tons of capacity. . However, within a very short period of time, many enterprises have exceeded 500,000 tons. It is impossible for these companies to operate for many years because of this rule. Therefore, the method is to make a lot of equipment. Now, there are not many companies under 2 million tons. “China’s private enterprises have a very strong package of capacity expansion. Adding new products and designing a new product process are more difficult for them, but expanding current capacity is a strength.”

Liu Xintian pointed out that domestic chemical companies are widely used, but their efforts in science and technology investment and talent reserves are still far from those of foreign countries. Private enterprises have limited talents. Now most of the chemical and private enterprises engage in scientific research is actually to give a college or an expert, private enterprises can digest the college to give the technology package is not bad. In general, private enterprises adopt more of a plagiarism approach to see which products make money and which companies make money. They copy people's products, dig them up, or copy their craft. This will cause the original fine chemical products not to be fine. Once the company's technology is not protected, many companies that do the same product will quickly emerge. This has led to overcapacity not only in the middle and upper reaches of the petrochemical industry, but also in downstream fine chemical products.

“The current situation is that state-owned enterprises have become Whampoa military academies, and talents have often been dug out by private enterprises with high salaries. These people will take away some technology and patents, so that private enterprises can expand production capacity more conveniently and without scientific research investment.” Liu Xintian also stated that private enterprises The original project was also explored, but it was often after some investigation. The reason for the failure is very simple, because it is not sure. After joining the new product, earning money and not talking about two, if you are faced with being plagiarized by other companies, I might as well copy someone else's!

Liu Yingqiu also pointed out that private enterprises actually have the impulse to innovate, but the big problem at present in China is that intellectual property protection and moral self-restraint are not enough. Innovative products and technologies are easily copied by others and used at no cost. This kind of situation is very common in China, which leads to private enterprises' innovations that do not have enough revenue to compensate for their innovation costs. This in turn causes private companies to be reluctant to innovate. “Insufficient incentive for private enterprises to innovate is not sufficiently related to the state’s support for private enterprise innovation. Can private enterprises’ innovative products provide certain support for tax reductions and tax exemptions? Can the government provide some subsidies for new product trials? These aspects The state does not do enough, resulting in enterprises in the process of innovation encountered insufficient funding, not the ability to do more in-depth and more lasting innovation."

Fourth, local governments have become promoters of business expansion. Changsha Yongkang, Jiangsu Changshu Hezhong Environmental Protection Technology Research Institute pointed out that private enterprises' expansion is now more crazy than state-owned enterprises. Private companies began to invest in listening to peers, listening to experts, or seeing that a product was profitable in the media. In order to maintain growth, all localities, except for some areas that are very polluting or where the state explicitly prohibits private enterprises from entering, have almost always given green light to the project. Local governments have no choice but to add more projects. For example, at the beginning of this year, the example of Bray Power Supply Co., Ltd., a battery manufacturer that produces more than 100 children’s blood lead in Huaining County, Anhui Province, was actually attracted by local environmental protection bureaus. In order to maintain growth, many local governments will decompose investment attraction tasks at the bottom, and at the end of the year, each investment promotion unit will have to accept the government's assessment, complete the bonus points, not complete the reduction points, and then rank, the person in charge of the later units will naturally face. There was no light, so they had to desperately attract investment.


The government should improve the market's rapid expansion of private enterprises. Industry insiders have offered advice. Much of the blind investment in methanol, glyphosate, and polysilicon has caused many private companies to come back.

Liu Xintian said that after 2006, many private enterprises in the western part of China started to sell millions of tons of methanol. For example, a company's methanol production capacity reached 1.35 million tons. The company built a 1 million-ton methanol plant in 2007. In 2008, it suffered a financial crisis and suffered heavy losses. Methanol currently accounts for 70% of the company's total operating revenue, but only contributes 30% of its profits.

The lesson of glyphosate is quite typical. In recent years, due to considerable profits, private enterprises have launched the glyphosate project. According to statistics, the total output of glyphosate in China this year reached 1.166 million tons, and the output was 300,000 to 500,000 tons. The annual demand for glyphosate in China was only 50,000 tons. Due to the overall surplus of glyphosate and fierce competition, the listed company of glyphosate suffered serious losses this year. The future prospect of glyphosate is also extremely gloomy. The Ministry of Agriculture stated that after the implementation of China's agricultural specialization and defense, the use of chemical pesticides will be reduced by 20% in the next five years. In the international market, the developed countries’ ability to research and develop pesticides is becoming stronger and stronger, and high-end products with high efficiency, low toxicity, and low residue are emerging, and drug efficacy can be continuously improved, which indirectly reduces the demand for pesticides.

The polysilicon industry is a new industry, but in a few short years, it has created an industry with excess capacity. In the past few years, with the temptation of polysilicon profits, domestic companies have set off a frenzy of polysilicon investment. According to statistics, China's polysilicon production in 2005 was only 60 tons, in 2006 it was only 287 tons, in 2007 it was 1156 tons, but in 2008 the madness to 4000 tons. As of the first half of this year, nearly 50 companies in more than 20 provinces such as Sichuan, Henan, Jiangsu, and Zhejiang are building, expanding, and planning to build polysilicon production lines with a total construction scale of more than 100,000 tons, which is the national output of 60 tons in 2005. Multiple times. If these capacities are fully realized, it will be equivalent to twice the annual global demand for polysilicon.

Just this year, the production capacity of domestic polysilicon investment has just formed large-scale production, and the price bubble has burst. Since the beginning of this year, under the bad situation of the global PV market, polysilicon companies in South Korea, the United States, and other countries have dumped polysilicon products to China through low prices, resulting in the reduction of production, production suspension or bankruptcy of many polysilicon enterprises in China. Only one or two of the 20 or so polysilicon companies in a province are still maintaining production. The rest have all been suspended and the number of layoffs is as high as 2,000.

Now there are some signs of surplus in the industry. The release of a large number of new production capacity is leading to a rapid decline in the PTA's industry climate. It is understood that the PTA price fell from 12,417 yuan/ton at the beginning of the year to the current 7,736 yuan/ton. It is expected that PTA prices will further fall to 7,000 to 7,500 yuan/ton in the first and second quarter of next year.

While the newly added capacity in various fields of chemical industry has increased rapidly, the trend of slowing economic growth in China is showing itself. Affected by the European debt crisis, the slow recovery of the United States, and China's control of inflation, China's GDP growth rate is forecast to be below 9% next year. Real estate, automobiles, household appliances, textiles and other industries with high correlation with the chemical industry will see from the fourth quarter. Not optimistic.

In the face of large-scale expansion of private enterprises, experts said that it is not appropriate to use administrative means to intervene, and it is even more impossible to treat private enterprises as they do with state-owned enterprises. Private enterprises belong to the market and should make the market work. Liu Yingqiu pointed out that when there is more than one production capacity in the market, prices will fall, and the market will automatically adjust the supply so as to reduce the supply. We should tolerate such a process of adjustment. We should not use excessive administrative measures to intervene as soon as we discover excesses. necessary. Market guidance has a process that generally lags behind. “What the government should do is to establish a market saturation index and regularly publish industry investment fever to regulate the pace of investment in the market. By strengthening the reporting, explanation, and introduction of information ahead of schedule, it helps companies to awaken early, change jobs early, and avoid serious overcapacity. ”

Hebei Zhengyuan Chemical recently established a new ammonia synthesis system with an ammonia synthesis tower diameter of 2.4 meters. This system is a large-scale ammonia synthesis system independently designed and manufactured by Zhengyuan, which has the advantages of energy saving and consumption reduction compared with the original equipment. At present, most large-scale ammonia synthesis systems in China still rely on imports. (CCIN reporter Xu Hong)