According to a recent report from Chemical Industry Online, on December 10, the first prestressed concrete pipe pile of the Jiangsu Honggang Petrochemical PTA Phase III project supervised by Luohua Group was hammered into the soil, marking the smooth start of the Honggang Petrochemical PTA Phase III project.
This project is located in the petrochemical industry base in Xuwei New District, Lianyungang. It includes four bidding sections: the main equipment of the 2.4 million tons/year PTA Phase III project, public works, finished product warehouse and central control room. The project investment is estimated to be 3.93 billion yuan, and the planned construction period is 880 days.
3.939 billion yuan is a big deal
Invest in the construction of a 2.4 million tons/year PTA project
On June 27, Jiangsu Oriental Shenghong Co., Ltd. announced that the company’s secondary wholly-owned subsidiary Jiangsu Honggang Petrochemical Co., Ltd. will invest in the construction of a 2.4 million tons/year purified terephthalic acid (PTA) phase III project. . Honggang Petrochemical currently has a PTA production capacity of 3.9 million tons/year. After this project is put into operation, Honggang Petrochemical will have a total PTA production capacity of 6.3 million tons/year. Honggang Petrochemical was established in March 2011 with a registered capital of 3.5 billion yuan. Its business scope includes methanol production, methanol, 1,4-xylene, and acetic acid sales.
From the perspective of the investment project itself, this project investment is to enhance production capacity on the basis of the original industry. The project covers an area of approximately 24.1 hectares and is located at the Lianyungang Petrochemical Industry Base in Xuwei New District, Lianyungang City, Jiangsu Province. It is planned to build a 2.4 million tons/year purified terephthalic acid (PTA) production unit and simultaneously implement desalted water storage tanks. , circulating water cooling station, comprehensive water supply station, sewage treatment, hydrogen compressor and PSA, public transformer and distribution room, finished product packaging and finished product warehouse, material library, transformer and distribution room, device tank area, device cabinet room and other supporting projects and Affiliated Facilities.
Dongfang Shenghong said that the implementation of this 2.4 million tons/year PTA project will help the company consolidate its scale advantage in purified terephthalic acid (PTA) production capacity and enhance the comprehensive competitiveness of the entire industry chain.
According to reports, this project investment is in line with the integrated development strategy of Dongfang Shenghong’s industry. It is an important intermediate link in the company’s “crude oil refining-PX/ethylene glycol-PTA-polyester-chemical fiber” industrial chain, and will digest the company’s Shenghong upwards. The paraxylene (PX) production capacity of the refining and chemical integration project will provide a stable supply of raw materials for the company’s polyester chemical fiber segment, which is conducive to the realization of the company’s development strategy and the sustained and stable development of production and operations.
This project adopts the most advanced green PTA production process technology that is further energy-saving and optimized, effectively reducing production costs. At the same time, the project will take advantage of the existing construction conditions of Shenghong Petrochemical Industrial Park and partially rely on the existing equipment reservations of Honggang Petrochemical to reduce the overall investment amount and help save energy and reduce consumption.
Strengthening industrial layout is expected to improve performance
Whether it is extensional mergers and acquisitions or connotative development, performance improvement is the key.
The reporter found that Dongfang Shenghong implemented a major asset reorganization in 2021 to acquire 100% of Sierpan’s equity, which caused considerable repercussions in both performance and market performance. With the expectation of mergers and acquisitions, the company’s stock price has been rising in 2021, once rising to just over 40 yuan in mid-September last year. Subsequently, it has been declining, and there have been signs of rebound in recent months.
From the perspective of industrial layout, strategic mergers and acquisitions have allowed Dongfang Shenghong’s main business to further expand high value-added olefin derivatives, add diversified petrochemicals and new energy and new material chemicals, and have a full industrial chain “from a drop of oil to a thread” Layout, enter the field of new energy and new materials, and form an industrial matrix of “refining + polyester + new materials”.
In terms of performance, Dongfang Shenghong’s adjusted operating income and net profit in 2021 increased by 53.48% and 492.66% respectively year-on-year. The signs of mergers and acquisitions boosting performance are very obvious.
Dongfang Shenghong’s industrial chain layout is conducive to enhancing its overall competitive advantage. The company’s business direction is to extend the industrial chain from bottom to top and expand the product chain from top to bottom, starting from downstream polyester chemical fiber, to midstream PTA, and then to upstream petrochemicals and refining, gradually laying out “crude oil refining-PX/ethylene two Alcohol-PTA-polyester-chemical fiber” integrated management and development structure of the entire industry chain.
From the perspective of the upstream and downstream industrial chain, Dongfang Shenghong’s refining and chemical segment is the raw material guarantee platform for the polyester chemical fiber industry and the new materials industry. Taking the bulk petrochemical raw materials of the Shenghong Refining and Chemical Integration Project as the platform guarantee foundation, we will implement the “1+N” strategy to further expand the new energy and new material business horizontally, forming a core raw material platform + new energy, new materials and other diversified industries. The “integrated” business structure of the chain.
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