Recently, the third phase of the Huayi Qinzhou Chemical New Materials Integrated Base Project, the largest single investment industrial project in Guangxi, started construction. A “double hundred billion” chemical base is about to emerge.
01 Double hundred billion
After the first and second phases of the previous projects were put into operation, a grand opening ceremony was held on November 25 for the third phase of Huayi Qinzhou Chemical New Materials Integrated Base. This is the largest single industrial project in Guangxi, with a total investment of approximately 100 billion yuan, and will be implemented in three phases. At the same time, this is also the largest chemical product production base with the most comprehensive product categories established by Huayi Group except its base camp in Shanghai. It is understood that after completion, the output value of the large base will reach 100 billion yuan, directly creating employment for 6,000 people. Qinzhou is located at the core of the Guangxi Beibu Gulf Economic Zone, with one end connected to the southwest and the other connected to ASEAN. At the intersection of the three main channels of the New Western Land-Sea Corridor, “Yangtze River Economic Belt Capital and Technology Export – Qinzhou High-end Manufacturing – Products Target ASEAN” “Market” regional industrial development pattern, and covers the four major industrial chains of modern coal chemical industry, light hydrocarbon cracking, salt chemical industry, and downstream petrochemical industry. Among them, the first phase of the project has a total investment of 16.2 billion yuan. It mainly builds industrial gas islands and comprehensive utilization projects of synthetic gas to produce chemical products such as methanol, acetic acid, and ethylene glycol. It has been completed and put into operation in June 2021. The second phase of the project has a total investment of 18.9 billion yuan and mainly produces polypropylene, butyl acrylate, bisphenol A, caustic soda, polyvinyl chloride, and other products. Specifically, there are the 750,000 tons/year propylene and downstream deep processing integration project constructed by Guangxi Huayi New Materials Co., Ltd.; the 300,000 tons/year caustic soda and 400,000 tons/year polyvinyl chloride projects constructed by Guangxi Huayi Chlor-Alkali Chemical Co., Ltd. In early March this year, I also successfully drove once. The third phase project, which is the final project of the “Double Hundred Billion Base”, has the largest investment amount, about 55 billion yuan. It is mainly used to produce new chemical materials, such as EVA and other olefin downstream materials, degradable materials, polyurethane materials, polycarbonate and nylon 66, etc. These olefin downstream materials will be used in new chemical material fields such as films, tapes, packaging, pipes, building materials, and new energy materials.
02 The future belongs to new materials
Compared with basic chemical materials, new chemical materials can be said to be “higher, stronger, and faster” and have the characteristics of high performance, high functionality, and high technology. Under the reshaping of the new generation of emerging industries represented by information technology, new energy, and intelligent manufacturing, higher requirements have been put forward for materials, such as ultra-high purity, ultra-high performance, high-speed iteration, ultra-low defects, etc. Nowadays, the new chemical materials industry has been recognized as one of the most important and fastest-growing industries, and it is also an important direction for the transformation of the petrochemical industry. Today, when the emphasis is placed on “double carbon”, it has been pushed to a crucial position. In April 2022, six departments jointly released the “14th Five-Year Plan for the Development of the Raw Materials Industry”, which pointed out that by 2025, the innovation capabilities of the new materials industry will be significantly improved, the R&D investment intensity in key industries will reach more than 1.5%, and several independent industries will be mastered. The key common core technologies of intellectual property rights. The “New Chemical Materials Industry “14th Five-Year Plan” Development Guide” mentions that eight categories of new chemical materials should be focused on the development: high-end polyolefin plastics, engineering plastics and special engineering plastics, polyurethane materials, fluoro silicone materials, special rubber and elastomers, High-performance fibers and composite materials, functional membrane materials, and electronic chemicals. According to relevant agency estimates, by 2026, the total output value of my country’s new materials industry will reach 12.3 trillion yuan, with an average annual compound growth rate of 14.0% from 2021 to 2026. It is worth noting that as the overall domestic chemical industry scale and demand continue to expand, the demand for new chemical materials, mainly in new energy and other terminal fields, has increased significantly. Take EVA as an example. With the rapid development of the photovoltaic industry, the demand for raw materials for photovoltaic film particles has also increased. Although global film production capacity is mainly concentrated in China, core packaging materials such as EVA and POE are still highly dependent on imports. According to statistics, more than half of EVA relied on imports in previous years. It was not until last year that it fell back, but it is still as high as more than 40%. On the one hand, there is strong demand and on the other hand, the domestic production rate is still low, which has created a market for the development of EVA materials. Not only EVA materials, this is also a common situation faced by many high-end new materials.
03 Heroes seize new heights
The future competition in the petrochemical industry will be in new chemical materials. The huge market and the urgency of transformation have attracted many players to enter the market. New chemical materials have become a new highland for the petrochemical industry to seize. Two barrels of oil, refining and chemical integration, private enterprises, foreign capital, and joint ventures have come to lay out their plans. When it comes to entering new materials, Sinopec has already begun its layout. In September 2020, Sinopec planned to invest 60.3 billion to build a high-end new materials project cluster in Tianjin Nangang. This is also an important strategic project between Sinopec and Tianjin to build a world-class new chemical materials base. This project includes 11 key projects including Tianjin Petrochemical Nangang’s 1.2 million tons/year ethylene and downstream high-end new materials industrial cluster, Beijing Research Institute of Chemical Industry pilot base, and photovoltaic new energy. It will extend the industrial chain and build 12 high-end units such as ultra-high molecular weight. New material installation. PetroChina has established a leading group for the development of new energy and new materials to coordinate the planning of new energy and new materials and promote the transformation of its refining and chemical business from “fuel-based” to “chemical products and organic materials-based”. Many refining and chemical companies under his command have opened up new material businesses, such as Lanzhou Petrochemical to create synthetic rubber specialty product clusters; Daqing Petrochemical to develop special fibers; Jinzhou Petrochemical to promote the construction of a world-class new materials base… Recently, a series of large new material projects have followed one after another. To date, there are many private and foreign companies among them. Recently, China National Chemical, Wanhua Chemical, and Tonghua Group cooperated. The “Three Modernizations” will jointly build China National Chemical New Energy Industrial Park, focusing on new energy, high-end electronic chemicals, food-grade phosphates, industrial-grade phosphates, and other fields to create a full-chain circular economy park. Dongfang Shenghong is building on the “big chemical” comprehensive chemical raw material supply platform constructed by refining and chemical integration, alcohol-based polygeneration, and propane industry chain projects to diversified industries such as new energy, new materials, electronic chemistry, and biotechnology. The “1+N” industrial layout with chain extension. On November 23, BASF signed a 40 billion yuan syndicated term loan arrangement for the Zhanjiang integrated base. This giant project located on Donghai Island, Zhanjiang, focuses on the production of engineering plastics, fine chemicals, etc. that BASF has independent intellectual property rights and meets the needs of the South China market. Once the overall project is completed, it will provide local and multinational manufacturers in southern China with solutions for industries such as automobiles, construction, high-speed rail, electronics and electrical, food packaging, home and personal care, aerospace, and pharmaceuticals. All these indicate that moving towards high-end products has become an inevitable choice for the petrochemical industry. However, the development of the new chemical materials industry as a whole shows the characteristics of high-tech leadership, fast product iteration, and an obvious trend of industrial clustering. In this way, if you want to occupy your territory in this slowly unfolding material jungle, the competition is more about the hard power in your fists.