The chemical industry encounters a transitional period under the storm of rectification

At the end of June, Jiangsu entered the rainy season with heavy rains frequently.
According to the weather forecast, Rudong County, which is close to the Yellow Sea, will hardly see sunny days in the next few days.
In the Yangkou Port Economic Development Zone, Rudong County, Jiangsu Changjiu Agricultural Science, a chemical plant with an annual output value of over 500 million yuan, has temporarily suspended production.
Not long ago, the company received a notice from the Emergency Management Bureau of Rudong County, Jiangsu Province and the Administrative Committee of Rudong Yangkou Port Economic Development Zone that the company needs to suspend production in order to manage related safety hazards.
Changjiu Agricultural Branch is a subsidiary of ST Changjiu, a listed company, with a 50,000-ton/year acrylamide production line.
After the cessation of production for rectification, the safety production supervision department will still need to review and agree to resume production.
Wind data shows that there are a total of 337 A-share listed chemical companies.
According to incomplete statistics from reporters of the Beijing News, from March to June 2019, nearly 20 listed chemical companies, including ST Changjiu, Fengshan Group, and Nanjing Chemical Fiber, issued production suspension announcements.
Zhao Hua (a pseudonym), a chemical expert from Jiangsu Province, told reporters that the current collectives of chemical companies in Nantong, Yancheng and other places have been shut down for rectification, and subsequent resumption of production needs to wait for the government to collect experience.
As of the end of June, Jiangsu Province has completed a full round of safety inspections for chemical companies.
Behind some companies waiting to resume production, some companies choose to relocate, and some listed companies are already seeking reorganization.
Nearly 20 listed chemical companies involved in shutdowns, mostly concentrated in Jiangsu.
  On June 27, ST Changjiu stated that its subsidiary Jiangsu Changjiu Agricultural Branch found hidden dangers in production safety and needed to suspend production in order to add automatic shut-off valves or interlocking devices.
  Changjiu Agricultural Branch is located in the Economic Development Zone of Yangkou Port, Rudong, Jiangsu.
ST Changjiu's operation largely relies on Changjiu Agricultural Branch.
  The data shows that ST Changjiu's operating income in 2017 and 2018 were 553 million yuan and 528 million yuan, and net profits were 26.
13 million yuan and 8.
01 million yuan respectively.
In 2018, Changjiu's operating income was 510 million yuan, and its net profit was 17.
64 million yuan.
  The suspension of production directly affects ST Changjiu's continuing operations.
ST Changjiu said that the company has not yet been able to adopt a diversified strategy to reduce the risk of production shutdowns.
If the local safety production supervision department approves the resumption of work beyond the company’s expectations, the negative impact of the temporary shutdown on the company’s operating income will increase year-on-year as the actual shutdown time increases.
If the company fails to obtain the resumption approval for a long time, the company’s ability to continue operations will face certain risks.
.
  On June 28, a reporter from the Beijing News called ST Changjiu, but the call could not be connected.
Then I contacted Changjiu Agricultural Branch.
The other party stated that the company has stopped production and the "new automatic shut-off valve or interlocking device" that needs to be rectified has been purchased and installed.
"Like the water valve at home is broken, (re)install it.
" Enough".
  ST Changjiu's announcement stated that Changjiu Agricultural Division strives to complete the initial installation and commissioning work before June 30, and plans to complete all the rectifications of the aforementioned safety devices within 15 days from the date of disclosure of the announcement, and formally report to the local area for safe production after the rectification is completed.
The regulatory authority submits an application for resumption of production.
  Changjiu Agricultural Branch stated that the company has submitted an acceptance report and is still waiting for the acceptance by the relevant departments.
Regarding the resumption of production time, it said that it is waiting for the local government to notify that "(may have to wait until) the entire round of inspections is over.
"   Zanyu Technology, a listed company in Rudong Yangkou Chemical Industrial Park, issued an announcement as early as May stating that Nantong Kaita Chemical Technology, a holding subsidiary, had ceased production on April 9 for inspection and rectification.
  The reporter found that since March this year, at least 17 listed chemical companies have announced that their companies or their subsidiaries are involved in the suspension of production, and most of the shutdown factories are concentrated in Jiangsu.
This is related to the regional distribution of listed chemical companies.
Wind data shows that according to Shenwan's industry classification, there are a total of 337 A-share chemical companies.
Among them, there are 61 in Jiangsu Province, accounting for 18.
10%; 43 in Zhejiang Province, accounting for 12.
76%; 36 in Shandong Province, accounting for 10.
68%; 34 in Guangdong Province, accounting for 10.
09%.
  In Yancheng, Jiangsu, the listed companies Fengshan Group and Huifeng Agriculture stopped heating supply due to safety inspections of the heating company in the park.
The two companies respectively temporarily suspended production of the original drug synthesis workshop and used the suspension to carry out safety production inspections.
In addition, Huai'an Chenhua New Materials Co.
, Ltd.
, a wholly-owned subsidiary of the listed company Yangzhou Chenhua, has ceased production since May 28 this year.
  When the rectification of the chemical industry was in progress, many large-scale inspections were carried out in many places   .
Behind the suspension of production of many listed companies or subsidiaries in Jiangsu, it was the local government's rectification and improvement actions on the chemical industry.
  Zanyu Technology mentioned in the announcement that the suspension of production and rectification is to implement the requirements of the Jiangsu Provincial Party Committee Office Suban (2019) No.
96.
  The above-mentioned "Suban (2019) No.
96" refers to the notice issued by the General Office of the Jiangsu Provincial Party Committee and the General Office of the Provincial Government on the issuance of the "Jiangsu Chemical Industry Safety and Environmental Protection Improvement Plan".
According to the notice, in order to learn the lessons from the "3·21" special major explosion accident of Xiangshui Tianjiayi Chemical Co.
, Ltd.
, the provincial party committee and the provincial government decided to immediately carry out the improvement of safety and environmental protection of the chemical industry in the province.
  After the issuance of the document, Jiangsu Province began to further investigate and assess the safety and environmental risks of enterprises below the designated size.
Enterprises that do not meet the standards must be closed and withdrawn before the end of 2020, and enterprises that meet the standards are encouraged to enter the chemical park (concentration area) for development.
  In fact, before the Xiangshui accident, governments at all levels in Jiangsu had put forward inspection and governance requirements for the chemical industry.
In November 2018, Jiangsu Suzhou, Suqian and other places have already started the "four batches" special actions in the chemical industry, that is, "close a batch, transfer a batch, upgrade a batch, and reorganize a batch.
"   Zhao Hua, an industry expert who followed the local government to investigate various chemical companies, told reporters that since the Xiangshui explosion, he followed relevant departments to run thousands of companies in a month to conduct safety inspections on the companies.
  Many listed companies also mentioned the rectification action in Jiangsu Province.
Their subsidiaries cooperated with government inspections and stopped work.
Some companies were found to have safety hazards during the inspections.
  In Xinyi City, Jiangsu Province, Lanfeng Biochemical accepted a special inspection of hazardous chemicals by the Ministry of Emergency Management on April 28 and found that the company's phosgene leakage absorption and destruction system did not realize automatic control.
On April 30, the company received a decision to order the temporary suspension of production issued by the Xinyi Emergency Management Bureau.
In addition, the subsidiary companies of Aoyang Health and Zhejiang Jihua in Jiangsu also cooperated with the inspection and ceased production one after another.
  In Shandong Province, which is adjacent to northern Jiangsu, some enterprises have also been affected.
Wanhua Chemical previously announced that its PDH plant in Yantai Industrial Park will be shut down for maintenance on April 1; Rike Chemical has been included in the "blacklist" for joint sanctions against untrustworthy production; due to the strengthening of the control of bromine products by the public security department, Lubei The chemical industry also issued relevant business data announcements at the request of the government.
  On June 26, the General Office of the Shandong Provincial Government released the first batch of key chemical monitoring sites, focusing on monitoring new and expanded chemical projects in the future.
In principle, they can only be carried out in the production plant area where the address is announced, and other production plant areas are not allowed to implement new construction or expansion.
project.
  On April 13, *ST Tianhua issued an announcement that all production equipment of the company's wholly-owned subsidiary Ningxia Hening Chemical Co.
, Ltd.
will be shut down for maintenance on April 10, and it is expected to complete the maintenance on May 10 and resume normal operation.
  In Liuzhou, Guangxi, after the Xiangshui incident, the emergency management department went to *ST Liuhua to inspect work safety, and pointed out that the company’s production had hidden safety hazards.
Since March 30, it has dealt with Liuzhou headquarters (that is, within Liuzhou City).
The relevant production system shall be discontinued.
  In Wuhan, Hubei, Dinglong's Wuhan plant received an on-site inspection by the South China Supervision Bureau and the environmental protection management department on May 25.
After the company's self-examination found that the company had problems with its sewage treatment facilities, it suspends production and implements rectification.
  After the labor pain: some took the initiative not to resume production, and some sought to reorganize the   chemical industry under the storm of rectification, and some companies announced the resumption of production.
On June 27, Yaben Chemical, which had been suspended for nearly two months, announced that Nantong Yaben received a written permission from the government to resume production and agreed to resume production.
Yaben Chemical said that after the resumption of production, the company will rationally allocate production capacity to minimize economic losses during the shutdown period.
  Lier Chemical, which ceased production in November 2018, announced on May 14 this year that it was approved by the Guang’an Safety Production Supervision Bureau and approved by the opening branch after on-site inspection and acceptance.
Guang’an Li’er has an annual production line of 1,000 tons of flumipropin and its supporting facilities construction project.
Resumption of trial production.
  The reporter noticed that most of the companies that are still discontinued are still waiting to see the government's policies, and some companies have begun to choose industry transfer or asset reorganization.
  Funing Aoyang Technology, a subsidiary of Aoyang Health Holdings, has ceased production since March.
On June 25, Aoyang Health stated that Funing Aoyang has the conditions to resume production.
However, due to the continued downturn in the viscose staple fiber market environment since the second half of 2018, it is currently at a historically low level.
According to Funing Aoyang’s calculations, at the current market price of viscose staple fiber, the products produced in the first and second phases of Funing Aoyang The gross profit margin is already negative, and it is more economical to stop production than to resume production.
  Zhejiang Jihua also announced that its subsidiary, Jiangsu Jihua, has the conditions for resuming production in terms of safety and environmental protection, fire management, process equipment, etc.
However, considering government policies, market environment and the company's own actual conditions, it still chooses to continue to suspend production.
  Zhao Hua told reporters that many companies in Jiangsu Province are currently waiting for the government's inspection and acceptance.
"The government's detailed rules have not yet been released, so there is no way to accept it.
"   Compared with passive waiting, some companies have begun industrial transfer.
On June 26, Zhejiang Wansheng Co.
, Ltd.
announced that, in response to the government’s urban planning, the company planned for the integration of production capacity in advance and gradually transferred the production capacity of Wansheng Technology to the company’s Duqiao Medical Chemical Park.
“As of June 25, 2019, Wansheng Technology has stopped production, and all production capacity has been transferred to the company's Duqiao Medical Chemical Park.
"   It is worth noting that in the context of the overall reshuffle of the chemical industry, there are also listed companies seeking mergers and acquisitions for their chemical companies.
  Sinochem International, a listed company, began to integrate its chemical industries.
The company announced in August 2018 that its subsidiary, Yangnong Chemical, would transfer 100% of the equity of Sinochem Crop Protection Co.
, Ltd.
and Shenyang Sinochem Pesticide Chemical R&D Co.
, Ltd.
, its wholly-owned subsidiaries, in cash, and the transaction price of the underlying assets.
Determine 900 million yuan.
  There have also been changes in the controlling rights of some listed chemical companies.
On January 7 this year, Rike Chemical announced that the controlling shareholder Zhao Dongri signed the "Share Transfer Agreement" with Jinhu Investment, which will cause the company's controlling shareholder and actual controller to change.
  In June 2018, Lier Chemical received a letter from the controlling shareholder Sichuan Jiuyuan Investment Holding Group Co.
, Ltd.
, indicating that the actual controller plans to change.
In December 2018, Jiangsu Lanfeng Biochemical also announced that it had received notices from the company’s controlling shareholder Suhua Group, Suhua Group, Green Investment, China Shaanxi Nuclear Industry Group and Shaanxi Jinhe jointly agreed on equity transfer and voting rights entrustment.
The controlling shareholder and actual controller of Lanfeng Biochemical will change.
  Zhao Hua himself is a senior manager of a listed company.
He believes that in the current environment, some listed chemical companies do not have the advantage of reorganizing and merging other companies, whether they are listed companies or non-listed chemical companies.
Now they all hope to be taken away.
They hope that state-owned, state-owned enterprises, and state-owned assets will acquire them, or large foreign companies will acquire them.
The state-owned enterprises will be more standardized and managed in a unified manner, such as Sinochem, Sinochem, and Sinochem Import and Export.
"   I used to go to the chemical industry, but now I want to go out.
" Zhao Hua, who has been in the business for more than 30 years, said to the reporter with emotion.