Wanhua Chemical Strategy integrates the ecological chain, with an annual output of 1 million tons of ethylene project

Wanhua Chemical plans to build 1 million tons/year of ethylene cracking and derivatives in Yantai, China, by 2020 as part of an integrated ecological chain strategy to drive growth and profitability, said Liao Zengtai, chairman and chief executive officer of Wanhua Chemical.
will include downstream polyethylene (PE), polypropylene (PP), PVC and other production units, Mr. Liao said in an interview.
the project is part of Wanhua's "ecological chain" integration strategy, which aims to integrate industrial production processes into closed-loop
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specifically, its goal is to produce other products using by-products produced by isocyanate, as well as to supply them with cheaper gas raw materials.
believes this longer "ecological chain" will reduce risk and improve profitability. "With the new ethylene project, our polyurethane (PU) business will continue to be at the heart of our future," Liao said.
hydrochloric acid is a by-product of isocyanate production processes. Isocyanate is also used to make PU.
"We will produce PVC from ethylene and hydrogen chloride (HCl), which have good prospects in China, because the government has enacted regulations restricting traditional PVC production methods, which currently account for the majority of the PVC market in China." But demand for this material will continue to grow. In
, most PVC is produced by coal-based vinyl and electro-stone methods, but the government has now restricted the use of coal to promote environmental improvement.
the rest of the world, PVC is produced from ethylene DVC (EDC) and then used to make PVC intermediate vinyl chloride monosomes (VCMs). Together with ethylene and chlorine, hydrochloric acid can be used to produce EDC.
also intends to benefit from cheap U.S. gas supplies.
First, during the North American shale gas revolution, liquefied petroleum gas (LPG), the main raw material for the fracking plant, may remain low for a long time to come, " he said. Secondly, and most importantly, the project provides a perfect export for HCl by-products from isocyanate production," Liao said.
MDI capacity increased by
Million Hua Chemical, the world's largest producer of methyl dibenzene cyanate (MDI), with a capacity of 2.1 million tonnes per year, and will continue to increase production capacity for the material despite concerns about slowing domestic demand.
MDI demand in China will not grow as fast as it used to because our country's economy has shifted from rapid growth to high quality, " Liao said.
a global perspective, the growth engine in North America will be architecture and furniture applications. Overall, we expect future demand for MDI to grow relatively healthy. He added.
Wanhua Chemical plans to increase MDI production capacity by 500,000 tons/year in Yantai at minimal cost through technological transformation, increasing Yantai's total MDI production capacity to 1.1 million tons/year by 2019 and increasing production capacity by another 300,000 tons/year at its Ningbo plant by 2020.
company also owns 300,000 tons/year of toluene dicycyanate (TDI) in Yantai, the world's largest single production line.
10 years of research and engineering practice, Wanhua also achieved industrial production of polycarbonate (PC) this year. Liao noted that the company launched its first 70,000-ton/year PC production line earlier this year and is currently expanding.
U.S. MDI
continues its ambitious expansion beyond China. On November 16th it announced a $1.25bn MDI project in the US, which is scheduled to open in 2021.
Believes that a better ecological chain is needed to drive sustainable growth, which is why the company has developed its own integrated industrial chain to make efficient use of energy and resources.
40 years, Wanhua has become the world's largest manufacturer of isocyanates and a major player in chemicals. Due to strong global MDI prices, Wanhua achieved 76% revenue growth and more than 200% profit growth in 2017.
Liao Zengtai attributes the company's success to its culture of innovation. The company began producing isocyanate in the 1980s, with an initial production capacity of only 10,000 tonnes/year of MDI, which suffered years of losses due to low production and poor quality. Realizing that technology was the biggest bottleneck, the company decided to invest in innovation.
today, Wanhua has six research and development centers around the world and employs about 1,500 people, nearly 50% of whom have a master's or doctorate degree. It has also innovated a unique technology that allows for the low-cost expansion of existing MDI capacity and will be used for expansion in Yantai and Ningbo.
open to mergers and acquisitions
in August 2018, Wanhua Chemical merged its controlling shareholder, Wanhua Chemical, with a total of 52.2 billion yuan. These include Wanhua Chemical's 47.924% stake, Wanhua Chemical (Ningbo) Co., Ltd.'s 25.5% stake, Yantai Xinyi Investment Co., Ltd.'s 100% stake, Wanhua International Resources Co., Ltd.'s 100% stake, Yantai Xinyuan Investment Co., Ltd.'s 100% stake, Yantai Chenfeng Investment Co., Ltd.'s 100% stake, and Borsodchem's 100% stake.
Said That Wanhua was open to merger and acquisition opportunities, but also pointed to challenges.
we haven't seen any good match for our strategic objectives, nor have we seen any deals that deliver synergies and good returns," he said.
comments on the U.S.-China trade war, Liao said Wanhua aims to take advantage of global supply chains from China and Hungary.
acquisition of Bosodchem, Wanhua has isocyanate and chlor-alkali assets in Hungary.
training staff
Chairman and CEO Liao Zengtai attributed the company's long-term success to the development of employees.
companies rarely hire senior managers from outside, but pick senior managers from within.
"Only those who carry Wanhua's unique DNA, with a deep understanding and a genuine recognition of the virtues of our hard work and contribution, are fit and comfortable to stay here for a long time." "
increase loyalty
in order to increase employee loyalty and productivity, the company has introduced performance-based rewards and incentives.
senior managers, middle managers and qualified employees also benefit from equity programs. These efforts have resulted in a low turnover rate of just 3 per cent.
"stable talent and team ensure a commitment to long-term goals and achievements," Mr Liao said.
About Wanhua:
Wanhua Chemical is mainly engaged in the development, production and sales of polyurethane products, petrochemical products, functional materials, specialty chemicals, is one of the most competitive MDI manufacturers in the world, Europe's largest TDI supplier.