In recent years, the petrochemical industry’s sub-sector that has attracted the most market attention is undoubtedly the private refining and chemical industry. With the entry of polyester giants such as Rongsheng, Hengyi, Hengli, and Tongkun, the industry structure is also undergoing tremendous changes. Looking at the development history of several major giants, they all started with polyester spinning, and gradually extended upstream along the industrial chain to PTA. After their listed financing volume grew, they all entered large-scale refining and chemicals. Although the development paths are similar, there are still big differences in the specific layout. Now, when these companies are expanding upstream, they have begun to work towards downstream spinning!
6.415 billion! Chemical fiber leader raises 3 billion
Start construction of new textile fiber project with annual output of 1.6 million tons
Hengyi Petrochemical announced on the 20th that the company will publicly issue convertible bonds with a face value of 3 billion yuan to the public. The entities implementing this project are Haining Hengyi New Materials Co., Ltd. and Suqian Yida New Materials Co., Ltd.
1. New functional fiber technology transformation project with an annual output of 500,000 tons
The total planned investment is 2.565 billion yuan, and the planned investment and raised funds will not exceed 700 million yuan. It is planned to use the existing factory buildings in Jianshan New District, Haining City, Zhejiang Province to build 2 sets of polyester production equipment (2×250,000 tons/year) and introduce high-speed FDY There are 1,056 winding machines and supporting domestic production equipment and public engineering equipment, using advanced domestic large-capacity flexible polymerization technology, polyester melt direct spinning technology, copolymer blending online addition technology, intelligent manufacturing technology, and green manufacturing technology. process technology, forming an annual production capacity of 500,000 tons of new functional fibers. The project construction period is 2 years and will be implemented by Haining Hengyi New Materials Co., Ltd. The implementation location is Jianshan New District, Haining City, Zhejiang Province.
2. New environmentally friendly differentiated fiber project with an annual output of 1.1 million tons
The total planned investment is 3.85 billion yuan, and the planned investment and raised funds will not exceed 2.3 billion yuan. It is planned to use about 500 acres of Suqian Yida New Materials Co., Ltd.’s factory land in Suqian High-tech Industrial Development Zone to build a new polyester workshop, spinning workshop, and PTA The area of the warehouse, supporting power station, sewage treatment and other buildings (structures) is approximately 463,401 square meters. The project mainly adopts polymerization, melt direct spinning technology, comprehensive intelligent manufacturing and green manufacturing technology, builds 3 sets of polyester production equipment, introduces domestic and foreign advanced short fiber production equipment, and adds a new environmentally friendly differentiated fiber with an annual output of 1.1 million tons. production capacity. The project construction period is 3 years and will be implemented by Suqian Yida New Materials Co., Ltd. The implementation location is Suqian High-tech Industrial Development Zone.
Overseas construction upstream, domestic expansion downstream
All upstream, mid-stream and downstream raw materials have been self-sufficient.
If it is said that heroes emerge in troubled times, then the polyester industry has become troubled because of the emergence of heroes in large numbers. The existing giants are the best representatives of private enterprises in my country’s chemical industry. They are all leaders in cost control and execution efficiency, far surpassing other sub-sectors. But the problem is that too many excellent companies gather in one industry, and competition becomes extremely fierce. And as long as any one company chooses a new direction, other companies will follow to the end, whether it is PTA or Big Refinery. Therefore, the industry has been trapped in a prisoner’s dilemma for a long time, and it is difficult to make profits. At present, in this new round of large-scale refining and chemical capacity expansion, each company is doing its best. Tactics are not the key, but more of a strategic level.
1. Taking the lead in building overseas factories: taking the lead in deploying terminals
When market costs remain high, in order to maintain the market, chemical fiber manufacturing companies must reduce costs to maintain normal production and operations. The relatively low labor and land costs in Southeast Asia, the Middle East and other countries may become the only choice. Chemical fiber manufacturing companies Global migration will become a direction of industrial transfer. Hengyi built its refineries overseas and avoided most domestic competition through export quotas. It faced small production capacity in Southeast Asia, so the pressure was undoubtedly much lower. Moreover, refining and chemical investment is much lower than that of other competitors, which also allows the company to have more funds for downstream expansion and seize the first opportunity to deploy terminals.
2. Domestic expansion of downstream: Provide guarantee for raw material procurement and product sales
Hengyi’s PTA factories and polyester factories are mainly located in Jiangsu and Zhejiang. Zhejiang Province and Jiangsu Province are the largest chemical fiber and textile product production bases in the country and even the world. They have complete supporting upstream and downstream industries from petrochemical raw materials and chemical auxiliary materials to textile fabrics, clothing production and other upstream and downstream industries. The superior geographical location provides Hengyi with raw material procurement, product Sales are guaranteed. In addition, Hengyi’s PTA factory and main polyester factory are located near important ports. Raw materials such as PX required for production can be directly transported from the port to the company, giving obvious advantages in comprehensive logistics. The Brunei PMB petrochemical project has natural location advantages, convenient crude oil procurement, and refined oil products can be sold to ASEAN, avoiding the situation of insufficient domestic crude oil production and overcapacity of refined oil products. At the same time, there are significant freight savings on both production and marketing ends.
In recent years, Hengyi has formed a columnar balanced integrated industrial chain of “crude oil-PX-PTA-polyester-polyester” through differentiated development models such as overseas construction of upstream refineries, domestic downstream expansion, mergers and acquisitions and reorganizations. As of the end of March 2022, Hengyi’s crude oil processing design capacity is 8 million tons/year; its PTA production capacity is 19 million tons/year; PIA production capacity is 300,000 tons/year; the company’s polyester production capacity is 10.465 million tons: polyester fiber production capacity 7.765 million tons/year, polyester bottle flakes (including RPET)�The production capacity is 2.7 million tons; the caprolactam (CPL) production capacity is 400,000 tons/year; the production capacity scale ranks among the top in the industry. We are self-sufficient in upstream, mid-stream and downstream raw materials, achieving balanced and coordinated development of the entire industry chain from large-scale refining to PX, PTA, and polyester (PET) production capacity.
At the convertible bond issuance online roadshow held on the 20th, Qiu Yibo, chairman and president of Hengyi Petrochemical, said that Hengyi Petrochemical, as one of the leading domestic and world-class refining-chemical-chemical fiber industry groups, continues to share resources, Collaborate to comprehensively enhance the company’s comprehensive competitiveness. Under the guidance of the “one drop of oil, two threads” development strategy, the company relies on the Brunei project as a fulcrum to increase the pace of internationalization, open up the “last mile” of the entire industry chain from oil refining to chemical fiber, and achieve internal heights in upstream, midstream, and downstream Matching columnar balanced integrated industrial chain. Create a unique “polyester + nylon” dual-“fiber” driving model among domestic peers, forming a core business with the petrochemical industry chain as the core business, with the supply chain service business as the growth business, with differentiated fiber products and industrial intelligent technology applications as emerging businesses The “Petrochemical +” multi-level and three-dimensional industrial layout of the business. The company’s main business is the research and development, production and sales of various chemical products, oil products and chemical fiber products. The products are widely used to meet the rigid needs of the national economy and people’s livelihood.
Qiu Yibo said that the public issuance of convertible corporate bonds by leveraging the A-share capital market platform is an important strategic move for the company to achieve its long-term development goals. In the future, Hengyi Petrochemical will continue to improve its core competitiveness, repay shareholders and society with excellent performance, and continue to move forward towards the great vision of “becoming one of the world’s first-class petrochemical industry groups”!
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