Honeywell Liu Maoshu: Where Are The Opportunities For Petrochemical Industry To Break Through And Transform In The Next Five Years?

After the release of the outline of the 14th five year plan, China's chemical industry will enter a new stage of development.

The plan proposes to resolutely curb the blind development of high energy consumption and high emission projects, and promote green transformation to achieve positive development. And promote the clean and efficient utilization of coal and other fossil energy, and promote the green transformation of steel, petrochemical, building materials and other industries.

At the same time, it is necessary to transform and upgrade traditional industries, promote the layout optimization and structural adjustment of petrochemical, iron and steel, nonferrous metals, building materials and other raw materials industries, expand the supply of high-quality products such as light industry and textile, accelerate the transformation and upgrading of enterprises in key industries such as chemical industry and papermaking, and improve the green manufacturing system.

It can be seen that transformation and upgrading and green transformation will be the most important theme of China's petrochemical industry in the future. "In the fourteenth five year plan, petrochemical and chemical industries will continue to eliminate backward production capacity and promote capacity integration, and on the other hand, realize the upgrading of industrial value chain through cleaner production, green development and technological innovation." Liu maoshu, vice president of Honeywell characteristic materials and technology group and general manager of Asia Pacific region, told reporters.

In his view, China's petrochemical industry is still full of opportunities in the future.

Overcapacity is just a surface

Not long ago, the "2021 China energy and chemical industry development report" issued by Sinopec economic and Technological Research Institute pointed out that the total refining capacity of China will reach 890 million tons / year in 2020. However, at present, the actual processing capacity of China's oil refining is less than 700 million tons per year, that is to say, more than 100 million tons of oil refining capacity is in excess every year.

It is also predicted that according to the current projects under construction, approved construction and planning, China's oil refining capacity will rise to 1.02 billion tons / year by 2025, becoming the country with the largest refining scale in the world. With the huge increase of refining capacity, the problem of overcapacity is becoming more and more serious.

According to the current surplus refining capacity, about 50 million tons of refined oil are produced. If the power is fully utilized, these products can only be digested by export. On the one hand, China's surrounding countries can not absorb such a large amount of refined oil exports; on the other hand, as a high energy consumption and high pollution industry, exporting oil products in large scale is equivalent to leaving pollution and energy consumption at home.

"At the same time, with overcapacity, China still needs to import a large number of high-end chemicals every year, which is a big pain point in the high-quality development path of China's petrochemical industry." Liu maoshu said, "we have a lot of production capacity that does not play its biggest role today and does not meet the market demand very well. Excess capacity needs to be transformed or upgraded. "

In recent years, China's petrochemical industry has set off a trend of large-scale. Zhejiang Petrochemical, Hengli petrochemical and other private enterprises have begun to explore the construction of large-scale refining and chemical integration base; international oil giants such as shell, BASF and ExxonMobil have invested in the construction of their own large-scale production bases in Guangdong; "three barrels of oil" is also seeking transformation in this trend.

"China's petrochemical market is a highly international market, even if it does not go abroad, it is still competing internationally." Liu maoshu believes that "from the long-term development point of view, all kinds of capital rush to the large-scale integrated base in China, which reflects the confidence in the development of China's market."

But on the other hand, the high investment in petrochemical industry also brings many challenges. "We need to clearly realize that the market is undergoing great changes. With the implementation of these major projects, the industry pattern will change significantly." He said.

Therefore, those enterprises that do not think about the future in this process do not make the transformation in terms of production capacity, technology and low-carbon, so they will be under more and more pressure and will be subject to great impact and pressure in the future.

"China now has a lot of flagship devices, which have played a lot of demonstration roles." Liu maoshu believes that "they have the requirements of future refineries. Such large-scale production capacity has accounted for about 20% of China's total production capacity, which is a capacity that can face the future."

At the same time, after the outbreak of globalization, the supply chain of many industries has gradually shifted from globalization to regionalization. In this process, China will give birth to more opportunities for chemical industry, especially high-end chemicals. "From the layout of the industrial chain, it is unreasonable to import a large number of high-end chemicals every year." "Many entrepreneurs are aware of this problem, and the urgency of transformation is very high," Liu said

In the next five years, large-scale, integrated, intelligent, green development and clean low-carbon development are some specific requirements for the petrochemical industry. At the industrial level, many local governments have put forward some specific implementation plans. For example, local refineries in Shandong Province and refineries with less than 5 million tons of oil may be shut down.

Excellent opportunity for stock market transformation

By the end of September 2020, China has made a commitment to the world that it will reach a carbon peak by 2030 and achieve carbon neutrality by 2060. This statement is regarded by the industry as an important part of China's transformation to high-quality development in the future. It has been highlighted in the following central economic work conference, this year's government work report and the 14th five year plan.

In the face of petrochemical industry, many people think that this is an industry that runs counter to safety and environmental protection. However, Liu maoshu believes that in the promotion process of "carbon neutrality", the traditional petrochemical industry will be impacted to a certain extent, but in the short and medium term, fossil energy is still the main force in the energy structure, and chemicals still have strong irreplaceable properties.

"For a long time in the future, the petrochemical industry will be an irreplaceable basic industry in China and even in the world." "Especially in our Petrochemical new materials, we haven't seen other better solutions in a short time," Liu said

Under the requirements of "carbon neutral" transformation, the supply side structural reform will be driven, the approval of new production capacity in domestic chemical industry will be further tightened, and enterprises with existing production capacity will benefit significantly, and the scarcity of domestic chemical industry leaders will be highlighted. Therefore, the value space of the enterprises which have been arranged in the large-scale refining and chemical integration base will be released in the future.

"For the stock market, this is a very good time to transform." Liu maoshu said, "at present, many chemicals are in a relatively tight situation in the short term, with higher prices. Enterprises also have better profit margins. The implementation of new technologies and transformation schemes can also bring them more opportunities."

In addition to the capacity replacement policy of the local government, besides the seven Petrochemical bases planned by the state, Shantou, Maoming and other cities are also carrying out their own large petrochemical base layout. These adjustments, combined with the technical transformation of chemical enterprises themselves, can greatly optimize the layout of China's petrochemical industry.

Under the guidance of the "14th five year plan", Liu maoshu gave his own suggestions to reporters in the face of high-quality development of China's petrochemical industry in the next few years.

First of all, China's petrochemical enterprises need technological innovation. Although it sounds quite traditional, the petrochemical industry is a technology intensive and capital intensive industry, with a long process route and high requirements for safety and environmental protection.

Enterprises themselves need to attach great importance to technological innovation, simple thinking and extensive planning can not meet the needs of the future. Especially in the future development trend of high-end chemicals, higher and newer technical support is needed.

Secondly, the transformation of petrochemical industry needs better intelligent tools. "In the past, many petrochemical enterprises understood that intellectualization was a control system or the use of some application software. This understanding was actually one-sided." Liu maoshu believes that "intelligence needs to be viewed at a higher level. At the overall enterprise level, better business insight can be achieved through data analysis to make business decisions."

The role of intelligence is reflected in two aspects: on the one hand, in the international crude oil and chemical products market with high-frequency price fluctuations, big data and other means are used to make business decisions to face the rapidly changing business environment; on the other hand, it is one of the most important guarantee means for green development and safe production to solve unnecessary emission and safety risks in the operation process.

Finally, we need to pay attention to the cultivation of high-end talents with global vision and global management experience, and some high-end technology R & D talents. "In the transformation of an industry, the implementation plan of entrepreneurs and managers in the process of transformation determines the success or failure of the enterprise." Liu maoshu said.

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