Asian Markets

December 17, 2018

Wanhua Profile

Wanhua cracker project part of ‘Eco-Chain’ integration

Source: ECN

2018/12/13

Wanhua Chemical plans to build a 1m tonne/year cracker along with derivative units in Yantai, China, by 2020 as part of an integrated eco-chain strategy to drive growth and profitability, said chairman and CEO Liao Zengtai.

The plant will include downstream polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC) and other production units, Liao told ICIS in an exclusive interview.

The project is part of Wanhua’s “Eco-Chain” integration strategy to put industrial production processes in a closed-loop.

Specifically, it aims to use byproducts from its isocyanates production to produce other products, as well as take advantage of cheaper gas feedstock availability.

Wanhua believes this longer “Eco-Chain” will mitigate risks and improve profitability. “With the new ethylene project, our PU (polyurethanes) business, which will remain our core in the future, will turn more efficient,” said Liao.

Hydrogen chloride (HCl) is a byproduct of the isocyanates production process. Isocyanates are in turn used to make PU.

“We will use ethylene and HCl to produce PVC, which has good prospects in China as the government enacted restrictions against traditional PVC production methods, which accounts for the majority of PVC in China’s market. But demand for this material will continue to grow,” said Liao.

In China, most PVC is produced from coal-based calcium carbide but now the government has restricted the use of coal in its environmental improvement push.

Elsewhere in the world, PVC is produced from ethylene dichloride (EDC), which is then used to make PVC intermediate vinyl chloride monomer (VCM). Along with ethylene and chlorine, HCl can be used to produce EDC.

Wanhua Chemical also aims to benefit from cheaper gas availability from the US.

“First, for liquefied petroleum gas (LPG), the major feedstock for the cracker, prices are likely to stay low for quite some time amid the shale gas revolution in North America. Second and most importantly, the project provides a perfect exit for HCl byproducts in isocyanate production,” said Liao.

MDI CAPACITY INCREASE

Wanhua Chemicals, which is the world’s largest methyl di-p-phenylene isocyanate (MDI) producer with an installed capacity of 2.1m tonnes/year, will continue to increase capacity of the material despite concerns about domestic demand slowing down.

“China MDI demand will not be able to grow as fast as before because our country’s economic growth has shifted from rapid pace to high quality,” said Liao.

“On a global perspective, North America’s growth engines will be construction and furnishing applications. Overall, we expect relatively healthy growth on future demand of MDI,” he added.

Through technical revamping and with minimal cost, Wanhua Chemical plans to add 500,000 tonnes/year of MDI capacity in Yantai to raise total MDI capacity at the site to 1.1m tonnes/year by 2019, and another 300,000 tonnes/year to its Ningbo plant by 2020.

The company also has a 300,000 tonne/year toluene di-isocyanate (TDI) unit at Yantai, the world’s largest single line.

This year Wanhua also achieved industrial-scale production of polycarbonate (PC) after 10 years of research and engineering. The company launched its first 70,000 tonne/year PC line early this year and expansions are in the pipeline, Liao noted.

US MDI PROJECT

Outside China, the company continues its ambitious expansions. On 16 November it announced a $1.25bn greenfield MDI project in the US, which is scheduled to come on stream in 2021.

Liao said Wanhua Chemical believes that a better eco-chain is needed to drive sustainable growth which is why the company has developed its own comprehensive industrial chain to efficiently use energy and resources.

In some 40 years’ time, Wanhua has emerged as the world’s largest isocyanates manufacturer and a major player in chemicals, Liao said.

Thanks to strong MDI prices globally, Wanhua posted a 76% revenue increase and over 200% profit growth in 2017.

It was this performance that made Wanhua the 2018 ICIS Company of the Year. It is the first China-based company to have ever won the title.

Liao attributes the company’s success to its culture of innovation and research. The company started isocyanates production in the 1980s with an initial capacity of just 10,000 tonnes/year of MDI and suffered years of losses because of low output and poor quality.

The company realised that technology was the biggest bottleneck and decided to invest in innovation, according to Liao.

Today Wanhua has six R&D centers worldwide staffed with around 1,500 professionals, nearly 50% of whom hold master’s or doctoral degrees.

It also innovated a unique technology that allows for low-cost expansions of existing MDI capacity, which will be used for expansions in Yantai and Ningbo.

Wanhua was formed in 1978 as a state enterprise and was restructured to a stakeholding company in 1998. In 2001 Wanhua Chemical was spun off and listed on the Shanghai Stock Exchange.

OPEN TO M&A

In August 2018 Wanhua Chemical completed the acquisition of a holding group that owned 47.92% of Wanhua Chemical, 25.5% of Ningbo Wanhua and 100% of Hungary-based Borsodchem.

Liao said Wanhua is open to mergers and acquisitions (M&A) opportunities both in China and abroad but pointed out challenges.

“We haven’t seen any good match that meets our strategic objectives yet or deals that could deliver synergy and good returns,” he said.

Commenting on the US-China trade war, Liao said that Wanhua aims to leverage its global supply chain from China and Hungary.

Through the Borsodchem acquisition, Wanhua has isocyanates and chlor-alkali assets in Hungary.

CULTIVATING EMPLOYEES

Wanhua Chemical chairman and CEO Liao Zengtai attributes the company’s long-term success to cultivating its employees.

The company rarely hires senior executives from outside the company – instead, it selects senior management from within.

“Only those who carry Wanhua’s unique DNA, with deep understanding and true recognition of our merits of hard work and contribution, are suitable and comfortable staying here in the long term,” according to Liao.

Boosting loyalty

Performance-based rewards and incentive programmes have been introduced to boost staff loyalty and productivity.

Senior managers, middle managers and qualified employees also benefit from stock ownership plans. Those efforts have resulted in low employee turnover rates of around 3% from resignations.

“Stable talent and teams ensure commitment to long-term goals and achievements,” said Liao.

The 55-year-old Liao has been working at Wanhua for his entire career, having joined the company in 1983.

https://www.icis.com/explore/resources/news/2018/12/13/10295113/wanhua-cracker-project-part-of-eco-chain-integration/

December 17, 2018

Wanhua Profile

Wanhua cracker project part of ‘Eco-Chain’ integration

Source: ECN

2018/12/13

Wanhua Chemical plans to build a 1m tonne/year cracker along with derivative units in Yantai, China, by 2020 as part of an integrated eco-chain strategy to drive growth and profitability, said chairman and CEO Liao Zengtai.

The plant will include downstream polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC) and other production units, Liao told ICIS in an exclusive interview.

The project is part of Wanhua’s “Eco-Chain” integration strategy to put industrial production processes in a closed-loop.

Specifically, it aims to use byproducts from its isocyanates production to produce other products, as well as take advantage of cheaper gas feedstock availability.

Wanhua believes this longer “Eco-Chain” will mitigate risks and improve profitability. “With the new ethylene project, our PU (polyurethanes) business, which will remain our core in the future, will turn more efficient,” said Liao.

Hydrogen chloride (HCl) is a byproduct of the isocyanates production process. Isocyanates are in turn used to make PU.

“We will use ethylene and HCl to produce PVC, which has good prospects in China as the government enacted restrictions against traditional PVC production methods, which accounts for the majority of PVC in China’s market. But demand for this material will continue to grow,” said Liao.

In China, most PVC is produced from coal-based calcium carbide but now the government has restricted the use of coal in its environmental improvement push.

Elsewhere in the world, PVC is produced from ethylene dichloride (EDC), which is then used to make PVC intermediate vinyl chloride monomer (VCM). Along with ethylene and chlorine, HCl can be used to produce EDC.

Wanhua Chemical also aims to benefit from cheaper gas availability from the US.

“First, for liquefied petroleum gas (LPG), the major feedstock for the cracker, prices are likely to stay low for quite some time amid the shale gas revolution in North America. Second and most importantly, the project provides a perfect exit for HCl byproducts in isocyanate production,” said Liao.

MDI CAPACITY INCREASE

Wanhua Chemicals, which is the world’s largest methyl di-p-phenylene isocyanate (MDI) producer with an installed capacity of 2.1m tonnes/year, will continue to increase capacity of the material despite concerns about domestic demand slowing down.

“China MDI demand will not be able to grow as fast as before because our country’s economic growth has shifted from rapid pace to high quality,” said Liao.

“On a global perspective, North America’s growth engines will be construction and furnishing applications. Overall, we expect relatively healthy growth on future demand of MDI,” he added.

Through technical revamping and with minimal cost, Wanhua Chemical plans to add 500,000 tonnes/year of MDI capacity in Yantai to raise total MDI capacity at the site to 1.1m tonnes/year by 2019, and another 300,000 tonnes/year to its Ningbo plant by 2020.

The company also has a 300,000 tonne/year toluene di-isocyanate (TDI) unit at Yantai, the world’s largest single line.

This year Wanhua also achieved industrial-scale production of polycarbonate (PC) after 10 years of research and engineering. The company launched its first 70,000 tonne/year PC line early this year and expansions are in the pipeline, Liao noted.

US MDI PROJECT

Outside China, the company continues its ambitious expansions. On 16 November it announced a $1.25bn greenfield MDI project in the US, which is scheduled to come on stream in 2021.

Liao said Wanhua Chemical believes that a better eco-chain is needed to drive sustainable growth which is why the company has developed its own comprehensive industrial chain to efficiently use energy and resources.

In some 40 years’ time, Wanhua has emerged as the world’s largest isocyanates manufacturer and a major player in chemicals, Liao said.

Thanks to strong MDI prices globally, Wanhua posted a 76% revenue increase and over 200% profit growth in 2017.

It was this performance that made Wanhua the 2018 ICIS Company of the Year. It is the first China-based company to have ever won the title.

Liao attributes the company’s success to its culture of innovation and research. The company started isocyanates production in the 1980s with an initial capacity of just 10,000 tonnes/year of MDI and suffered years of losses because of low output and poor quality.

The company realised that technology was the biggest bottleneck and decided to invest in innovation, according to Liao.

Today Wanhua has six R&D centers worldwide staffed with around 1,500 professionals, nearly 50% of whom hold master’s or doctoral degrees.

It also innovated a unique technology that allows for low-cost expansions of existing MDI capacity, which will be used for expansions in Yantai and Ningbo.

Wanhua was formed in 1978 as a state enterprise and was restructured to a stakeholding company in 1998. In 2001 Wanhua Chemical was spun off and listed on the Shanghai Stock Exchange.

OPEN TO M&A

In August 2018 Wanhua Chemical completed the acquisition of a holding group that owned 47.92% of Wanhua Chemical, 25.5% of Ningbo Wanhua and 100% of Hungary-based Borsodchem.

Liao said Wanhua is open to mergers and acquisitions (M&A) opportunities both in China and abroad but pointed out challenges.

“We haven’t seen any good match that meets our strategic objectives yet or deals that could deliver synergy and good returns,” he said.

Commenting on the US-China trade war, Liao said that Wanhua aims to leverage its global supply chain from China and Hungary.

Through the Borsodchem acquisition, Wanhua has isocyanates and chlor-alkali assets in Hungary.

CULTIVATING EMPLOYEES

Wanhua Chemical chairman and CEO Liao Zengtai attributes the company’s long-term success to cultivating its employees.

The company rarely hires senior executives from outside the company – instead, it selects senior management from within.

“Only those who carry Wanhua’s unique DNA, with deep understanding and true recognition of our merits of hard work and contribution, are suitable and comfortable staying here in the long term,” according to Liao.

Boosting loyalty

Performance-based rewards and incentive programmes have been introduced to boost staff loyalty and productivity.

Senior managers, middle managers and qualified employees also benefit from stock ownership plans. Those efforts have resulted in low employee turnover rates of around 3% from resignations.

“Stable talent and teams ensure commitment to long-term goals and achievements,” said Liao.

The 55-year-old Liao has been working at Wanhua for his entire career, having joined the company in 1983.

https://www.icis.com/explore/resources/news/2018/12/13/10295113/wanhua-cracker-project-part-of-eco-chain-integration/

December 14, 2018

Dow Opens Polyol Plant in Thailand

Dow opens polyol plant in Thailand

Dow Chemical announced the opening of a new polyol plant for rigid polyurethane foam in Rayong, Thailand. According to the company, the facility increases its capacity to offer insulation materials and solutions with reliable, energy-efficient performance.

The polyol plant has a designed annual capacity of 79,000 t and is located at the Asia Industrial Estate (AIE) site in Rayong province. The AIE site covers 515 hectares and is home to six Dow manufacturing plants.

Approximately 150 guests from customers and partners joined Dow leaders to attend a dedication ceremony on 8 November 2018. The polyol plant strengthens Dow’s upstream plant integration in Thailand and further expands the company’s presence in Asia Pacific, following the recent opening of new polyurethane systems houses in Lote Parshuram, India and Zhangjiagang, China.

“This announcement demonstrates Dow’s commitment to our ongoing investment in Polyurethanes in order to bring to our customers a reliable supply of innovative solutions aligned to global trends such as population growth and energy efficiency,” said Jane Palmieri, business president, Dow Polyurethanes. “The Rayong facility is an important addition to Dow’s global polyurethanes manufacturing network, further enabling us to deliver industry-leading products that help customers minimise their environmental footprint, while creating lasting social, environmental and economic benefits throughout the entire product life cycle.”

“We are living in an era when innovative and effective solutions are needed to address imperative sustainability challenges, including energy consumption and climate change,” said Christina Yu, commercial director Asia Pacific, Dow Polyurethanes. “This is particularly important in Asia Pacific where significant population growth and increasing energy consumption is translating to higher demand for energy efficiency solutions, which Dow is best positioned to deliver as the world’s leading material science company.”

“This new plant further solidifies Dow’s key manufacturing base in Thailand and is an important milestone in our expansion in Asia Pacific, demonstrating our long-term commitment to the country and the region,” said Chatchai Luanpolcharoenchai, president of Dow Thailand. “With this boost in capacity and our advanced technologies, we are better positioned to meet increasingly sophisticated customer demands.”

www.dow.com

https://www.gupta-verlag.com/news/industry/22302/dow-opens-polyol-plant-in-thailand

December 14, 2018

Dow Opens Polyol Plant in Thailand

Dow opens polyol plant in Thailand

Dow Chemical announced the opening of a new polyol plant for rigid polyurethane foam in Rayong, Thailand. According to the company, the facility increases its capacity to offer insulation materials and solutions with reliable, energy-efficient performance.

The polyol plant has a designed annual capacity of 79,000 t and is located at the Asia Industrial Estate (AIE) site in Rayong province. The AIE site covers 515 hectares and is home to six Dow manufacturing plants.

Approximately 150 guests from customers and partners joined Dow leaders to attend a dedication ceremony on 8 November 2018. The polyol plant strengthens Dow’s upstream plant integration in Thailand and further expands the company’s presence in Asia Pacific, following the recent opening of new polyurethane systems houses in Lote Parshuram, India and Zhangjiagang, China.

“This announcement demonstrates Dow’s commitment to our ongoing investment in Polyurethanes in order to bring to our customers a reliable supply of innovative solutions aligned to global trends such as population growth and energy efficiency,” said Jane Palmieri, business president, Dow Polyurethanes. “The Rayong facility is an important addition to Dow’s global polyurethanes manufacturing network, further enabling us to deliver industry-leading products that help customers minimise their environmental footprint, while creating lasting social, environmental and economic benefits throughout the entire product life cycle.”

“We are living in an era when innovative and effective solutions are needed to address imperative sustainability challenges, including energy consumption and climate change,” said Christina Yu, commercial director Asia Pacific, Dow Polyurethanes. “This is particularly important in Asia Pacific where significant population growth and increasing energy consumption is translating to higher demand for energy efficiency solutions, which Dow is best positioned to deliver as the world’s leading material science company.”

“This new plant further solidifies Dow’s key manufacturing base in Thailand and is an important milestone in our expansion in Asia Pacific, demonstrating our long-term commitment to the country and the region,” said Chatchai Luanpolcharoenchai, president of Dow Thailand. “With this boost in capacity and our advanced technologies, we are better positioned to meet increasingly sophisticated customer demands.”

www.dow.com

https://www.gupta-verlag.com/news/industry/22302/dow-opens-polyol-plant-in-thailand

December 10, 2018

Chinese TDI Update

Why the TDI Price Move in a Different Pattern This Year?

2018-12-04    [Source:PUdaily]

share:

  1. Price movement throughout the year

The pattern of global TDI price movement for the full year takes shape as the year of 2018 is drawing to an end. This year, both prices in Renminbi and dollar terms show a downward trend. This is mainly because the facilities of BASF in Germany (with an annual capacity of 300,000 tons) and Sadara in Saudi Arabia (with an annual capacity of 200,000 tons) started normal operation, leading to increased global supply. On the other hand, due to the slowing global economy and growing uncertainties, the growth in demand slows, putting downward pressure on the prices.

But the Renminbi price and dollar one show different patterns of decline. Overall, the dollar price drops sharply. In contrast, the decline of Renminbi price is slower. In May and August, the price even bounced back. But in September and October, on the news that Wanhua put its new facilities into production, the price fell sharply. The patterns of decline are different because few of the additional TDI products from Germany and Saudi Arabia entered China as they mainly went to foreign markets. From January to September, over 11,000 tons of goods from Saudi Arabia entered China, only accounting for about 1% of domestic TDI consumption. This means limited impact on domestic demand and supply. In addition, it is worth mentioning that China exported more than 66,000 tons of TDI for the January-September period, decreasing by about 22% from the same period last year.

  1. Average price for the full year
    The table below shows the TDI average price for 2017-2018. As for the average prices in Renminbi terms, the lower price is offered by Chinese manufacturers in east China, and the higher price is offered by foreign producers in Shanghai. In terms of the average prices in dollar terms, they reflect the price of goods sold in southeast Asia by Japanese and South Korean manufacturers. From the table it can be seen that although the global TDI price is on a downward trajectory, the average price remain high throughout the year, suggesting that TDI manufacturers can still make decent profits. Besides, benefitting from the faster decline in raw material cost than in sponge price the profits of downstream manufacturers rally. However, the dealers are faced with a difficult situation this year. The distinct pattern of price movement compared with the previous years and growing uncertainties have made their decision-making on trading more difficult. As a result, it is harder for them to make a profit.
  2018 (January-November) 2017 (January-November) Change
Average price in RMB 29,080-29,864 31,087-31,802 -6%
Asian average price in USD 3,667-3,802 3,790-3,904 -3%

 

3.Recent price movement
The recent TDI price has broken the law that the price will surely fall after it consolidates for a while. In the second half of November, the price neither went up nor fell. It didn’t go up because whether Wanhua would put into production its new facilities remained uncertain. And it didn’t fall due to short supply of goods from Shanghai. During the second half of the month, the trading remained thin and the market players were pessimistic about the future. The long sideways movement suggests that currently balance has been struck between supply and demand. The future movement of the price depends more on supply and demand than market players’ mentality.

http://www.pudaily.com/News/NewsView.aspx?nid=75067