The integration advantages of Luxi Chemical Park

During the transition period, the chemical product line gradually became more abundant. Since the company was listed, the main business was traditional fertilizer business, with urea and compound fertilizer being the main products of the company; in 2004, the company’s fertilizer business accounted for 94.5% of the company’s total revenue, and the chemical business. Only about 5.5%; With the deepening of domestic economic development and the adjustment of domestic industrial structure, the company put forward the development idea of ​​“intensity adjustment of stocks, incremental adjustment”, focusing on the development of added value on the basis of unchanged total amount of chemical fertilizers. Higher fine chemical products; Under the guidance and promotion of the company's strategy, the company's fertilizer product revenue ratio dropped to 70.1% in 2011, while chemical products accounted for 29.9% of the total; the company’s structural transformation began to show results. Also from the traditional chemical fertilizer production enterprises, it is transformed into an integrated chemical group with chemical fertilizers as the mainstay, coal chemical industry, salt chemical industry, and fluorine chemical industry combining with each other, and the advantages of industrial chain integration are obvious. At present, the company's urea production capacity is 1.95 million tons, compound fertilizer is 1.5 million tons, and it also owns 100,000 tons of chlorosulfonic acid, 100,000 tons of DMF, 100,000 tons of **, 100,000 tons of sodium formate, 120,000 tons of methane chloride and other chemical products. .

The long-term operation of the aerospace furnace has gradually improved. In November 2011, the company's raw material route and power structure adjustment project, the annual output of 300,000 tons of urea project was successfully put into operation. This project adopts the advanced technology of HT-L pulverized coal pressurization continuous gasification (space furnace The company achieved a successful start of the aerospace furnace project and a long-term safe and stable operation throughout the year. It has been operating for 380 days since it was started. The long-term stable operation of the aerospace furnace brings huge cost advantages to the company, resulting in improved profitability and increased competitiveness. We believe that the advantages of the company's space furnace are mainly reflected in two aspects: First, compared with the company's original fixed bed gas process, the space furnace uses low-cost bituminous coal as raw material, while the fixed bed uses expensive lump coal as the Raw materials and raw material cost advantages are prominent. At present, the company's space furnace urea cost is around 1650 yuan/ton, while the fixed bed technology cost is around 1850 yuan/ton; followed by the commonly used Texaco water coal slurry pressure gasification technology and Shell. Compared with dry pulverized coal pressurization technology, it has less investment (saving 1/3), short construction period (shortening of construction period by 1/3), low operation and maintenance costs, simple and easy operation of process flow, and carbon conversion rate and synthesis of space furnace Gas purity has advantages over other processes. We believe that the company's space furnace has been operating stably for a long period of time since one year, and its technology and technology have been fully tested in industrialization, and its competitive advantage is obvious. With the stable operation of the aerospace furnace, the production cost of the company's syngas has dropped significantly. This not only reduces the company's urea production costs, but also provides the company with an extension of the downstream coal chemical product chain to provide high-quality syngas, and the space furnace will also be one of the company's parks. The intensive and intensive operation mode provides strong support and will be the engine and locomotive for the development of the company.

The advantage of park integration and low-cost competition lies in our 2013 annual chemical strategy report “Mature deepening: new starting point, consumption end, and big perspective — standing at the starting point of the second capital cycle of the mature stage of the chemical industry”. The overcapacity in the chemical industry and the full competition of the industry, whether from the perspective of the industry or from the perspective of the enterprise, the space for cost reduction is getting smaller and smaller. The means and methods are less and less; because, from the perspective of the industry, the industry produces the basic raw materials. , Depreciation and Amortization increase steadily, and manpower and environmental protection costs continue to increase. From the perspective of enterprises, the means for enterprises to reduce costs include economies of scale (including upgrading the scale of equipment and parks), upward integration, and advanced technologies and reductions. Other costs (transportation, manpower, environmental protection, etc.) At present, leading domestic companies have established production scales that are at or near the world level; the ultimate goal of upward integration is resource acquisition, but chlor-alkali and other industries have generally shown signs of generalization of resource advantages, and the main means of reducing manpower and environmental protection costs are the westward migration. However, this will increase transportation costs.

We believe that park integration will be an important means and method for companies to reduce costs and increase their competitiveness. Ruxi Chemicals is actively exploring the integration and operation of the park; Luxi Chemical Industrial Park is a large-scale chemical industrial park independently owned by domestic chemical companies. The park was built in 2004 and the total planning is 13 square kilometers. The total investment of the park is 12 billion yuan, covering an area of ​​nearly 4 square kilometers. At present, the industrial park has begun to take shape, initially forming a comprehensive chemical park with coal chemical industry, salt chemical industry, and fluorosilicone chemical industry as a whole and equipment manufacturing as an important support. The park includes water, electricity, gas, environmental protection, and fire protection facilities. complete.

The advantages of the park are mainly reflected in the following: the integration construction brings down the amortization of public works, the park unifies the supply of water, electricity, and steam, and the park has its own power plant, with an annual power generation of 2.5 billion kWh and a cost of 0.47 yuan/kWh. Electricity outsourcing requires 0.70 yuan/kWh (a urea preferential price of 0.56 yuan/kWh); energy is used reasonably and effectively in the power generation process; if medium pressure steam is used for power generation, low pressure steam will be greatly reduced due to production of other chemicals. Production costs, improve energy efficiency. The number of unit personnel input decreased. As the company adopts park-based production and management, the number of personnel required for a single installation and factory is significantly reduced. At the same time, the park adopted a centralized treatment of environmental protection, which reduced the environmental costs of individual chemical products. Under the current background of increasing environmental protection standards and tightening environmental protection policies, environmental protection costs have become the most important cost for chemical production enterprises. The unified treatment reduces environmental risks and disposal costs. With the gradual improvement of the industrial chain of the chemical industry in the park, there are many upstream and downstream chemical products that can be transported through pipelines to reduce transportation and packaging costs, such as urea and downstream melamine. If any melamine production enterprises need to purchase urea, then use steam. Dissolving the production, the company can directly input liquid urea into the melamine production line through the pipeline, which can save the urea drying and the dissolution costs, while reducing the packaging and handling costs.

Structural adjustment, from quantitative to qualitative change The current park products are mainly urea, other coal chemical industry chain, **, DMF; salt chemical industry chain of methane chloride, chlorinated paraffin and chlorosulfonic acid, coal salt chemical phase Combined formic acid, sodium formate and so on. At present, the park has established a comprehensive chemical industrial park with coordinated operation of aerospace furnaces and a number of chemical industry centers. Although the current chemical products in the park are relatively basic and common, the basic chemicals are the integrated operation of the park and provide a platform for low-cost competition. It also lays a good foundation for the park to invest in high-tech and high-value-added products in the future. We believe that with the launch of the octanol and caprolactam projects, the product structure of the park will undergo tremendous changes. At the same time, we also saw from the company's upcoming production of butyl octanol project that the integration of the park will bring cost advantages. The park will have a full range of public facilities such as water, electricity, gas, environmental protection and fire protection. The amortization of public works will be low, and at the same time it will produce butanol. The required synthesis gas and hydrogen gas are other plant products in the park and can be transported through pipelines. The current price of coal, propylene, and octanol is estimated. The estimated gross profit per ton is 1,500 yuan, and the estimated net profit is about 200 million yuan; with 13 years Six months of caprolactam production, the advantages of park integration will be fully reflected.

The short-term urea business is a stabilizer for the company's earnings. The basic chemical business is at the bottom. It provides flexible space for 13 years. The long-term stability of the space furnace provides a low-cost synthesis gas for the park. The cost advantage of octanol is significant and the profitability is considerable. Caprolactam The project put into operation will add icing on the cake. With the gradual realization of the company's advantages in park development, new products will be launched in sequence, and the company's competitive advantage will gradually emerge. We expect the company's EPS for the year 12 and 13 to be 0.23 and 0.37 yuan. It is estimated that the 12-year revenue will be 12 billion yuan. The current market value of the company is 5.8 billion yuan, and the PS is only 0.48, PB is 1.1 times. We are optimistic about the profit recovery and assessment of the chemical industry for 13 years. The value increases, so the low market rate varieties will have a greater flexibility. The company gave the company an overweight rating for the first time.