Wan Hua Chemical Industry Smashed 2 Billion 400 Million In Rongcheng And Fujian Petrochemical Co Construction Of MDI And Aniline Matching Projects.

The Limited by Share Ltd of Wanhua chemical group (hereinafter referred to as "Wanhua chemical") issued an announcement on foreign investment in March 3rd. In March 2nd, the company and the Fujian petrochemical Refco Group Ltd (hereinafter referred to as "Fujian petrochemical") jointly established Wanhua chemical (Fujian) Co., Ltd. (hereinafter referred to as "Wanhua Fujian") according to the 80%:20% shareholding ratio, and Wanhua Fujian's first registered capital. For RMB 3 billion yuan, Wanhua chemical subscribed 2 billion 400 million yuan in cash, accounting for 80% of the registered capital; Fujian Petrochemical related assets subscribed 600 million yuan, accounting for 20% of the registered capital.

According to the joint venture agreement signed by the two sides, the joint venture will take 64% of the shares of Fujian Cornell at zero price, and build 400 thousand tons / year MDI and aniline matching project through Cornell Fujian. The joint venture company intends to build TDI device and direct matching device, expand the capacity of TDI to 250 thousand tons / year, build 400 thousand tons / year PVC project, and continue large-scale coal gasification project.

Fujian Petrochemical Group is a large enterprise group invested in refining and chemical industry, chlor alkali chemical industry, fine chemical industry, and research and design, product distribution and other businesses. The main products include ion-exchange membrane caustic soda, propylene oxide, polyether, TDI, PTA and so on.

Fujian Petrochemical will divestiture the TDI device from the existing assets of the southeast electrification, the relevant land use rights and the direct supporting devices as joint venture assets, and invest in Wanhua Fujian through the audit and evaluation of the certified public accountants and asset appraisal institutions, with the TDI installed capacity of 100 thousand tons / year.

The announcement shows that the joint venture company's implementation in the western port industrial area of Jiangyin port city economic zone in Fuzhou includes, but is not limited to: TDI from the current 100 thousand tons / year to 250 thousand tons / year, the construction of 400 thousand tons / year PVC, the continuation of large-scale coal gasification projects and other projects. The Fujian subsidiary Cornell Polyurethane Co., Ltd. (hereinafter referred to as "Fujian Cornell") is building a 400 thousand ton / year MDI project and supporting Aniline Project.

According to the foreign investment contract, Wanhua chemical acquired 49% stake in Southeast electrification in cash. The company's southeast electrification will expand the production capacity of caustic soda, from the current 120 thousand tons / year and the 300 thousand tons / year built to 600 thousand tons / year, and the overall plan of the southeast electrochemical chlorination and thermoelectricity project will be led by the ten thousand Hua Fujian joint venture company.

Wanhua chemical said that the investment will achieve the company's production base layout in Southeast China, enhance its competitiveness in the MDI and TDI industry, and enhance the market position of polyurethane industry.

First textile network reporter learned that as of now, Wanhua chemical MDI has a total capacity of 2 million 40 thousand tons / year. The industry believes that from a backward state-owned enterprise to the world's largest MDI manufacturer, innovation is the secret of the success of Wanhua chemical.

Ping An Securities analyst Chen Jianwen said earlier that the purpose of Wanhua chemical's involvement in petrochemical business is mainly to match the polyurethane business. Because of the advantages of propane dehydrogenation and light hydrocarbon cracking, naphtha cracking has the advantages of raw material supply and production cost. Therefore, Wanhua's Propylene plate mainly adopts the advanced propane dehydrogenation process, while the ethylene project under construction is mainly used. In the process of steam cracking liquefied petroleum gas, the existing propylene and its downstream products not only bring new profit growth point to Wanhua chemistry, but also achieve synergistic effect with polyurethane plate.

For example, propylene propylene products are raw materials of polyether, acrylates are raw materials of Wanhua functional chemicals and advanced materials business, and butanol and hydrogen from the polyurethane business can be used as raw materials or gas for petrochemical business. After the ethylene project was completed, it not only achieved synergy with propylene business (for example, the propane dehydrogenation by-product of ethane could be used as feedstock for steam cracking, ethylene as a by-product propylene could be used as propylene oxide feedstock), and the EO, MMA and other chemicals produced by the ethylene project would also cooperate with the polyurethanes plate, functional chemicals and advanced materials.

In Chen Jianwen's view, chemical stocks are highly cyclical, but the rapid growth of Wanhua chemical has ironed the common cyclical nature of chemical stocks. In the past 2010-2018 years, the average annual compound growth rate of the company's revenue reached 26%, and its net profit growth rate was 27%. The annual compound growth rate of the company's total assets was 25%, and the annual compound growth rate of the company's owners' equity was 24%.

Chen Jianwen said frankly, the fundamental reasons for the high growth are the following: first, the main downstream applications of Wanhua chemical products, the rapid development of real estate, furniture, household appliances, automobile industry and electronic and electrical industry in recent years, which greatly stimulated the sales of Wanhua; two, due to the above reasons, the production and sales volume of major products increased rapidly, and Wanhua chemical production capacity expanded rapidly. At present, Wanhua is already the world's largest MDI producer. At the same time, in order to achieve synergy with the MDI business of the company, Wanhua's business scope has been extended to TDI, polyether, propylene industry chain and ethylene industry chain. Three, Wanhua chemical is constantly carrying out technological innovation. The single scale of MDI may be the largest and scale advantage in the world, which greatly reduces marginal investment cost. The production cost per ton makes the Wanhua chemical better than its competitors in the domestic and international market competition.

Chen Jianwen said frankly, over the past forty years of reform and opening up, our country's chemical industry has made remarkable achievements. However, most of the sub sectors still have a big gap compared with overseas competitors. From the observation, MDI and its polyurethane industry are an exception. As a whole, the gap between domestic MDI and polyurethane industry has been smaller than that of foreign countries. The cost is even better than that of foreign competitors. The narrowing of the gap at home and abroad is largely due to the efforts of Wanhua chemical for many years.

It is understood that at present, Wanhua's MDI production technology is ahead of any competitor in the world in terms of scale, energy consumption and product quality. At present, the single capacity of the company can reach 1 million 100 thousand tons, and the technology of seventh generation and 1 million 500 thousand tons is being developed. The expansion of single scale is an important reason for the company's cost advantage. With the expansion of single scale, the marginal investment of MDI has been decreasing continuously. For example, the investment of 500 thousand tons of new capacity in Yantai park is only 100 million yuan, and the new capacity of 300 thousand tons in Ningbo park only needs tens of millions, which makes the entry barrier of the industry more and more high.

According to the 2018 annual report, the proportion of functional chemicals and advanced materials accounted for 10% of the total chemical revenue, accounting for 9% of the profits, accounting for a small proportion, but it has great significance for Wanhua's future technological advantages. According to Wanhua chemical related planning, it is estimated that after 5 years, the proportion of polyurethane, petrochemicals and new materials in Wanhua's operating income is 4:4:2, and profits are three pillars.

From the point of view of capacity, Wanhua chemical has built 130 thousand tons of capacity in the polycarbonate field, and will reach 450 thousand tons in the future. As the world's third TPU producer, the company's capacity has reached 100 thousand tons / year and will reach 130 thousand tons in the future. SAP now has 30 thousand tons, will reach 60 thousand tons in the future, and MMA production capacity will reach 50 thousand tons / year, and it will be expanded to 150 thousand tons. In addition, Wanhua chemical is a globally competitive special isocyanate supplier. At present, its capacity is 50 thousand tons and will reach 130 thousand tons in the future.

In addition, we need to see that in 2018, Wanhua chemical disclosed the announcement on the construction of MDI integration project in the United States. It initially planned to build 400 thousand tons of MDI capacity in the United States and locate Convent city in Louisiana. The project was originally planned to start in 2019 and put into operation in 2021. However, due to various factors such as the international environment, the company announced in 2019 that the US project was temporarily suspended, but the company still plans to have 400 thousand tons of MDI capacity in the US.

Chen Jianwen stressed that most of the downstream demand of MDI has been postponed, but most of them have the characteristics of delayed consumption. With the implementation of epidemic prevention and control, the upgrading rate of downstream industries is not expected to have a substantial impact on the chain of polyurethane industry. At the same time, along with the ethylene project in the second half of this year, the project itself will become the Wanhua chemical industry. The synergy effect of ethylene, propylene, polyurethane and new materials will be further strengthened.

Public information shows that Wanhua chemical is a well-known chemical enterprise in China and even in the world. Its predecessor is the Yantai synthetic leather factory. In the early days of reform and opening up, China was in desperate need of synthetic leather raw material MDI (two phenyl methane diisocyanate). After hard negotiations, it finally introduced the first domestic MDI production line from Japan's NPU (East Cao predecessor). After technological digestion, Wanhua has carried out continuous technological innovation. MDI technology has become more and more stable, and the scale of single set production is bigger and bigger. Now it has become the largest MDI producer in the world.

Wanhua chemical business is mainly divided into three parts:

First, polyurethane business: covering MDI, TDI, polyether polyols and other polyurethane industrial clusters.

Two is the petrochemical business: propylene and its downstream acrylic acid and ester, propylene oxide, currently under construction ethylene and its downstream LLDPE and ethylene oxide.

The three is functional chemicals and materials business: mainly covers polycarbonate, SAP, waterborne PUD, PA emulsion, TPU, ADI series and so on. Wanhua has a wide range of products and is widely used. Its main downstream applications include living homes, sports and leisure, automobile transportation, construction industry and electronic and electrical appliances.

From the perspective of business structure, polyurethane business is the largest business of Wanhua, contributing half of its revenue and 3/4 of profits, while the petrochemical sector accounts for 31% of revenue and 9% of its profits; fine chemicals and advanced materials account for 10% of revenue and 9% of profits.

According to the financial report, in the first three quarters of 2019, Wanhua chemical realized business income of 48 billion 540 million yuan, down 12.5% from the same period last year, and realized net profit of 7 billion 890 million yuan, down 41.8% from the same period last year.