Metallurgical

 1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Polyether glycol (hereinafter referred to as polyether) is made via the polyaddition reaction of initiator (compound containing active hydrogen radical) in the existence of ethylene oxide (EO), propylene oxide (PO) and butyl oxide (BO), etc. The maximum output of polyether can be achieved with glycerol (propanetriol) as the initiator and epoxides (generally mixed PO and EO) through the changes of some conditions such as charging mode of PO and EO (mixing or separating), charging proportion and charging sequence, etc., so a lot of general polyether glycol is produced. Polyether glycol is the important derivative of PO and one of the main materials of synthesizing polyurethane.

The utmost purpose of polyether glycol is to produce polyurethane plastics; the second is to be used as surface active agents such as foam stabilizer, antifoaming agent of the papermaking industry, crude oil demulsification agent, acid treatment wetting agent of the oil well and high-efficiency low foamer, etc.; it is also used as lubricant, hydraulic fluid, heat exchange fluid and quencher, emulsion foaming agent, multiple cutting and drawing agent constituents and special solvents, etc.

The polyether glycol produced in the project is mainly used as the material of synthesizing polyurethane, its performances are closely related to the initiator. If the initiators are different, the performances and purposes are also difficult, described as follows:

1Polyether diol

Polyether diol, mostly taking 1,2-propylene glycol as the initiator, is mainly used to prepare soft polyurethane foam, elastomer, adhesive, fiber and synthetic leather, etc.

2Polyether triol

Polyether tri-alcohol is produced with glycerol (propanetriol) and trimethylolpropane, etc. as initiator. It is the basic material of soft, semi-hard and hard polyurethane foam.

3Polyether tetrol

Because the types of initiator taken are different, polypropylene oxide (tetra-hydroxyl polyether) is generally divided into ethylenediamine polyether glycol and pentaerythritol polyether glycol. Tetra-hydroxyl polyether made with ethylenediamine as the initiator via the ring-opening polymerization with propylene oxide is called “amidogen ether”, mostly applied as the material of the polyhydric alcohol with the catalytic action in the spraying formula on the hard foam site. It, taking pentaerythritol as the initiator, is mainly applied in the general hard foam formula.  

4Penta-hydroxyl polyether

Penta-hydroxyl polypropylene oxide ether is also divided into two types. One type, taking diethylenetriamine (diethylene triamine) as the intiator, is polymerized with propylene oxide to generate penta-hydroxyl propylene containing nitrogen, with the catalytic action; the other, taking xylito containing 5 hydroxyls as the initiator, is catalyzed and polymerized with propylene oxide to generate penta-hydroxyl polyether. The two types of polyether are applicable to the hard polyurethane foam plastics.

5High-functionality polyether

Hexa-hydroxyl polyether can be achieved with hexa-hydroxyl compounds such as glucitol and mannitol as the initiators, pressurized and polymerized with propylene oxide in 100110 and in the catalytic action of KOH. Such a type of polyether contains 6 hydroxyls, with the high functionality, so the hard polyurethane foam made with it has the big degree of crosslinking and the product has the good oil resistance, thermal oxidization resistant and dimension stability. 

1.1.2 Market Prospects

1Supply and demand in the international market and forecasting

Polyether glycol, due to some advantages such as rich materials, variable varieties, convenient processing and rational price, etc., has been rapidly developed all the time. In 2004, the capacity in the world is 5.205 million tons and the consumption is 4.123 million tons. In 2011, the capacity in the world is 8.8 million tons and the consumption is 6.08 million tons. The annual average growth rate of the capacity of polyether glycol in the world is 7.8% and the annual average growth rate of consumption is 5.7% in 2004-2011. Viewed from the development trend, except that the rapid growth of the demand in the previous economic development cycle brings about the rapid growth of the capacity in 2009, the growth rate of the capacity has been obviously slowed down in the recent 3 years and it has been about 3.5%, the growth rate of the demand has been about 4% and the utilization of capacity has been kept to be 70%. Viewed from the development of the output and demand in the world, it tends to develop when the supply is more than the demand, but viewed from the dropout of the capacity from the energy conservation and environmental protection as well as technical progress and the demand of some lower-stream industries of building materials, automobiles and refrigerators, etc. for polyurethane, the output and demand of polyether glycol will still keep the stable growth.

The capacity of polyether glycol in the world is mainly focused on the West Europe, the US and China. In 2009, the capacity distribution of polyether glycol in the world is shown in Table 2. The centralization of the foreign polyether glycol industry is high, the capacity of the first 5 enterprises in the US accounts for 89% of that of the whole country and the capacity of the first 5 enterprises in the West Europe accounts for 93% of the total. The main manufacturers of polyether glycol in the world are some transnational companies such as Dow, Bayer, BASF and Shell, etc., with the capacity as 1.5812 million tons, 1.2643 million tons, 0.9074 million tons and 0.643 million tons, respectively and the total is 4.395 million tons, accounting for 53% of the capacity of the world.

Central and East Europe

 

West Europe

 

Viewed from the lower-stream consumption, polyether glycol is mainly used to produce polyurethane, accounting for about 80% of the total consumption of polyether and the consumption in other fields accounts for 20%.

2Supply and demand in the domestic market and forecasting

The output and demand of polyether glycol of our country has been obviously accelerated since 2004. In 2004-2011, the annual average growth rate of the capacity is 18%, the annual average growth rate of the output is 12.5% and the annual average growth rate of the demand is 15.9%. Although the growth of the capacity is rapid, the effective capacity is not too high and the utilization of capacity is only about 70%. The supply and demand have become balanced from the end of 2011 to 2012. However, limited by the capacity structure and technical strength of our country, our country needs to import hard foam and special polyether.

At present, there are more than 30 polyether glycol manufacturers in our country. In 2011, the capacity reaches 2.56 million tons, the total output reaches 1.8 million tons and there are nearly 20 manufacturers with the scale above 10 thousand-ton level. The main manufacturers are Polyurethane Business Department of Shanghai Gaoqiao Petrochemical Co.,Ltd., CNOOC Shell, Jiangsu Zhongshan Chemical Co., Ltd., Polyurethane Business Department of Tianjin Petrochemical Co.,Ltd., Jinhua Chemical Group Co.,Ltd., Shandong Dongda Chemical Industry Group Co., Ltd., Fuzhou Meizhouwan Chlorine Alkali Industry Co., Ltd. and Tianjin Dagu Chemical Co., Ltd., etc. 

In recent years, the construction of the domestic polyether glycol devices has been obviously accelerated. In 2010, Dongda Lanxin built the new 0.2-million-ton/year polyether glycol device. In addition, there will be the multiple domestic polyether glycol devices in a certain scale put into production in 2011-2012. At present, the projects under construction are those of Shaoxing Hengfeng, Jurong Ningwu, Changshu Yitong, Shanghai Fushun Jiahua, Binzhou Fushun Jiahua, Nanjing Jinpu Zhongshan, Dexin Lianbang and Nanjing Hongbaoli, etc. There will be the new and expanded domestic 0.6-million-ton/year polyether glycol projects in 2011-2012. Viewed from the current on-going conditions of the project, it is forecast that the total domestic capacity of polyether glycol will have been about 2.76 million tons by the end of 2012.

At present, the majority of the domestic polyether glycol is used in the polyurethane industry. Statistics show that such a proportion is nearly 80% in 2010.

In 2010, the growth rate of the output of refrigerators, freezers, automobiles and soft furniture of our country is 27.2%, 35.9%, 35.2% and 29.9%, respectively, which has effectively promoted the demand for polyether glycol so as to bring about the rapid growth of the capacity of polyether glycol in 2011 and 2012.

Viewed from the price trend of polyether glycol in 2007-2011, after the lowest price in the first half year of 2009, the minimum price is 14000 yuan/ton at the end of 2011. Viewed from the price in 2012, the average price in the domestic market should be 14500 yuan/ton in 2013. 

Analyzed from the development of the polyurethane industry, it is predicted that the annual average growth rate of the demand for polyether glycol will be 5.6% in 2010-2015 and the demand will reach 2.25 million tons in 2015. At present, the industrial statistics show that the capacity of most of the domestic polyether products will be expanded in the future. It is predicted that the capacity will have been 3 million tons by 2015. However, considering the matching upper-stream materials and sales of the lower-stream products, we predict that the actual output should be less than 2 million tons and some products should be still imported.

1.1.3 Technical Analysis

Most of polyether glycol is synthesized by taking the base catalysis intermission process at present. When the base catalysis intermission process is taken, because of the low activity of the catalyzer and big dosage, the complex post treatment of catalyzer removal should be carried out, so the production cycle is long and the productivity is low. Although the technical process is advantageous for the flexibility of the product, the operating control and product quality are unstable.

The polyether glycol synthesized by the continuous method has the lower degree of unsaturation and narrower molecular weight distribution than that by the intermission method, and at the same time, it can improve the stability of the product, greatly improve the productivity of the reaction kettle, reduce the energy and material consumption and finally achieve the purpose of reducing the production cost. 

The project plans to take the continuous method to synthesize polyether glycol. Viewed from the world, the main manufacturers taking the continuous method to synthesize polyether glycol are Bayer, BASF, Dow and Mitsui, etc. and the main domestic manufacturers are Shanghai Gaoqiao and Hongbaoli, etc.

1.1.4 Advantageous Conditions of Project Construction

1Macro-policy

With the advancing of the energy conservation and discharge reduction targets of the National “12th Five-Year Plan”, the energy efficiency standard for the freezer and household solar hot water system, two terminal energy consumption products has been promulgated, the reform of the wall heat preservation materials have also been continuously perfected and a series of favorable policies have brought the new development opportunities for the polyurethane industry. Polyether glycol, as one of the important materials of the polyurethane production, also faces the development opportunity.

At present, 80% of the polyether glycol of our country is used in the polyurethane field and mainly used to produce soft polyurethane foam, hard polyurethane foam and CASE system. Viewed from the market share, soft polyurethane foam accounts for about 70%, hard foam accounts for about 25% and CASE accounts for less than 5%.

Viewed from the lower-stream consumption structure, the soft polyurethane foam is mainly used in the fields of furniture and automobile seats, the hard foam is mainly used in the refrigerating, heat preservation and building industry as well as solar water heater and the CASE system is mainly applied in some fields of dopes, adhesives, sealants and elastomers, etc. In the recent 2 years, with the continuous improvement of the national importance attached to energy conservation and discharge reduction, green energy and environmental protection, the demand for the hard foam polyether in the building field and the demand for the soft foam polyether in the automobile field have been expected to keep the strong momentum of development. However, viewed as a whole, the capacity of the soft foam polyether of our country is surplus and relatively saturated and the growth rate should be not less than that of the hard foam polyether in the future.

At present, the consumption of the hard foam polyether of our country is still focused on the refrigerating industry, accounting for about 58% of the total consumption of hard foam and only about 22% in the building industry. In some countries of Europe and America, the proportion of the hard foam in the building and energy conservation fields is more than 50%. In the future years, with the end of the development period of refrigerating, heat preservation and solar water heaters of our country, the building energy conservation market will become the field where the growth of demand for hard polyether foam will be the rapidest.

Songyuan Municipal Government has attached great importance to the invitation of investments from overseas and established a series of relevant policies of attracting the investments from overseas. It is mainly to give some preferences in some aspects such as tax collection, land leasing and good-quality service, etc. and keep the continuity and stability of the policies. And especially for the gas and chemical industrial projects, the Opinions of Songyuan Municipal People’s Government on Accelerating the Development of the Petrochemical Industry (SZF (2011) No. 15) has been promulgated, giving more preferences and supports in some aspects such as land and tax collection, etc.

2Resource and industrial advantages

In Songyuan, there are sufficient materials to develop the lower-stream products of propylene. There are also rich oil and natural gas resources. The prospective reserve of oil is 2.7 billion tons and the explored reserve now is 1.42 billion tons, the reserve of natural gas is 1.4 trillion m3 and the explored reserve is 300 billion m3, the annual oil gas output of Songyuan City is 5 million tons. Depending on the oil resources of our city and the 1.5-million-ton/year refining device of the original Qianguo Oil Refinery of PetroChina Jilin Oilfield Co., Ltd., Songyuan City has introduced the 1 million tons propylene project of Changchun Zhongcheng Investment Group has been carried out steadily. Therefore, there are the sufficient materials to develop the lower-stream products of propylene and it is easy to build the complete industrial chain.

3Personnel advantages

Songyuan College of Vocational Technology can cultivate 8000 technicians every year. There are a lot of colleges and universities in some cities around Songyuan City such as Changchun, Harbin and Daqing, etc., which can provide more than 0.5 million personnel. Songyuan Municipal Government has signed the personnel and scientific and technological cooperation framework agreement with Beijing Branch, Shenyang Branch and Changchun Branch of the Chinese Academy of Sciences, which has provided the scientific and technological support for the development of the enterprises. In addition, the original Qianguo Petrochemical Co., Ltd. and Songyuan Petrochemical Co., Ltd. have the rich reserves of oil gas chemical personnel.

1.2 Content and Scale of Project Construction

1.2.1 Product Scale

The project is planned to take the continuous method to synthesize polyether glycol and the scale of the device is determined to be 0.15 million tons/year, and the varieties can be chosen to be hard polyether glycol, soft polyether glycol and POP and the detailed choice should be determined by the investor according to the market conditions. The annual operating time is 8000 hours.

1.2.2 Project Construction Content

The project builds a 0.15-million-ton/year polyether glycol device and auxiliary facilities. The device covers an area of 80000m2, with 180 staff members.

1.3 Total Investment and Funds Raising of the Project

The total investment of the project is 800 million yuan, of which the fixed-assets investment is 610 million yuan.

Table 8: Summary Table of the Total Investment of the Project

                                       Unit: 10 thousand yuan RMB

No.

Expense Name

Amount of Investment

Proportion in the Total Investment %

Remarks

1

Construction investment

61000

76.25

 

2

Interest in the construction period

 

 

 

3

Current fund

19000

23.75

 

 

Total investment of the project1+2+3

80000

100.00

 

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the output, the annual sales income will be 2175 million yuan, the profit will be 159.64 million yuan and the investment recovery period will be 7.0 years (after the tax, including the construction period of 2 years), the internal financial yield rate will be 15.1% and the investment profit rate will be 20%.

Table 9: List of the Main Financial Benefits Forecasting Indexes

No.

Name

Unit

Index

Remarks

1

Sales income

10 thousand yuan/a

217500

Normal years

2

Total profit

10 thousand yuan /a

15964

Normal years

3

Internal financial yield rate of the total investment

%

15.1

After the income tax

4

Net financial present value Ic=10%

10 thousand yuan

28195

After the income tax (operating period: 10 years)

5

Recovery period of the total investment (after the tax)

a

7.0

Including the construction period of 2 years

6

Investment profit rate

%

20.0

 

Note: “10 thousand yuan” in the table refers to RMB.

1.4.2 Social Evaluation

After the project is built, it will be favorable to build the complete industrial chain, promote the industrial upgrading, promote the lower-stream industry to develop and increase the local employment, play the good role of promoting the local social development and also promote the progress of the pillar industry of Jilin City.

1.5 Ways of Cooperation

Sole investment of the investor

1.6 What to be Invested by Foreign Party

Funds, equipment and technology

1.7 Construction Site of the Project

Jilin Songyuan Oil Chemical Industry Circulating Economic Park

1.8 The On-going Condition of Project

The cooperative proposal of the project has been established

2. Brief Introduction of the Cooperator

2.1 Basic Conditions

Name: Songyuan Oil Chemical Industry Circulating Economic Park

Address: Songyuan Oil Chemical Industry Circulating Economic Park

Legal representative: Li Yan

2.2 Overview

Songyuan Oil Chemical Industrial Circulating Economic Park is a provincial-level industrial development zone, with the total planned area of 4.64 km2, is now planned to be expanded to 28 km2. As one of the two special chemical industrial parks of Jilin Province, depending on the local rich oil, natural gas and biomass resources, the park orients the dominant industries into the three industrial blocks, that is, oil and gas chemical engineering, biological chemical engineering and fine chemical engineering. During the “13th Five-Year Plan”, the park, focusing on the building of the three major industrial blocks, implements the strategy of the leading projects for promotion, makes efforts to promote the businessmen invitation ,capital attraction and project construction and try to establish the 30-50 billion output value scale. By now, the 0.1-million-ton propylene project, of Zhongcheng Group and the 0.2-million-ton biomass synthetic oil project of Yangguang Group have settled in the development zone and the investment construction has been started.

2.3 Contact Modes

Postal code: 138000

Contact person: Yu Zhengyang

Tel: 0438—2960097

Fax: 0438—2960098

E-mail: shihuayuanqu1818@163.com

Contact person of the city (prefecture) of the project: Han Baidong

Tel: 0438-2706617   13514384757

Fax: 0438-2706617

E-mail: 870550387@qq.com

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