"Downstream" Re-transformation of Private Refineries: From Chemical Fiber to Refining to New Energy and New Materials

In recent years, large private refining and chemical enterprises, including leading enterprises such as Hengli Petrochemical and Dongfang Hong Sheng, began to shift from oil refining and light hydrocarbon cracking to downstream new energy and new materials. Most large-scale private refining and chemical enterprises started from the chemical fiber industry, and took the opportunity to enter the upstream para-xylene (PX) field by taking advantage of the east wind of the policy of that year to create a new pattern of upstream and downstream integrated whole industrial chain. Nowadays, the leading enterprises among them have begun to "swim downstream", actively deploy new energy and new materials projects, and set off a new wave of transformation.

A new wave of transformation has quietly emerged.

Looking back at the development history of large private refining and chemical enterprises, there is a very important node, that is, 2065438+August 8, 2004. On this day, the State Council issued "Opinions on Several Major Policy Initiatives to Support the Revitalization of Northeast China in the Near Future". The "Opinions" put forward that localities and enterprises should do a good job in the preliminary work of Hengli Refining and Chemical Integration Project and strive to start construction as soon as possible. This is the first breakthrough of private enterprises in China in major refining and chemical projects, which has important historical significance. On February 9, 20 15, the foundation stone laying ceremony was held for Hengli Petrochemical Refining and Chemical Integration Project, becoming the first private enterprise in China to enter the field of petroleum refining and chemical engineering.

Since then, many private enterprises from the chemical fiber industry have begun to transform to the upstream refining and chemical industry, among which the outstanding ones have even opened up an integrated refining and chemical industry chain and achieved a leap in scale and profit. At present, the private large refining and chemical sector has formed a strong pattern represented by leading enterprises such as Hengli Petrochemical, Rong Sheng Petrochemical, Hengyi Petrochemical, Dongfang Hong Sheng and Tongkun Co., Ltd. The data shows that these leading enterprises have strong profitability. Even at the bottom of the historical extreme cycle (the first three quarters of 2020), these leading enterprises still have accumulated profits of about 20.4 billion yuan.

In addition, the expansion and transformation of downstream textile enterprises to upstream was the general trend under the guidance of policies at that time. "The state's support for private refining and chemical projects has gradually increased, and private refining and chemical enterprises have frequently obtained policy dividends, enabling them to untie the supply constraints of various raw materials in the upstream." The relevant person in charge of Hengli Petrochemical said. Since 20 15, the oil and gas reform has been further promoted, and the "dual rights" of crude oil import have been gradually liberalized, which has solved the raw material problem of refining projects and provided a broad development space for private enterprises to refine.

Different from the last round of transformation, which has key time nodes and project nodes, today's large private refining and chemical enterprises have quietly set off a new round of transformation trend.

As one of the leading private refining and chemical enterprises, Hong Sheng Group has the largest single-process refining and chemical integration project in China, with an annual output of160,000 tons. This project is a key project to promote the planning and layout of the national petrochemical industry. Hong Sheng Group has adopted international leading technology to increase the ratio of chemical products in short supply from about 50% to over 70%, providing raw material guarantee for the "chain extension" of strategic emerging industries such as new energy and new materials.

In addition to private large-scale refining and chemical enterprises actively brewing transformation, light hydrocarbon integration leading satellite petrochemical has also begun to lay out new energy and new material integration projects. On March 20th, 20021,Zhejiang Satellite Petrochemical Co., Ltd. and Air Liquide Group of France jointly built a new energy integration project with an annual output of 1.75 million tons. The total planned investment of this project is11500 million yuan, and it is planned to be put into production before June 2024.

Construction site of refining and chemical integration project of Hengli Group. (Photo courtesy of the enterprise)

The transformation of private large refining and chemical industry is imperative

"The goal of' double carbon' will accelerate the low-carbon development of China's energy structure, have a major impact on the development mode of the energy industry, and promote the transformation of enterprises from traditional energy consumption to green new energy and high-end new materials." The relevant person in charge of Hong Sheng Group talked. In this situation, it is the best choice for large private refining and chemical enterprises to develop downstream new energy and new materials to adapt to national policies.

Private large-scale refining and chemical enterprises have unique advantages in transforming into downstream new energy and new materials. First of all, its industry consolidation advantage is obvious. According to Song Yanping, deputy director of the Refining and Chemical Institute of China Petroleum Planning Institute, most large private refining and chemical enterprises such as Rong Sheng Petrochemical, Hengyi Petrochemical and Tongkun Co., Ltd. started from polyester and expanded from downstream to upstream. These enterprises usually have a complete industrial chain of "spinning-polyester-purified terephthalic acid-aromatic hydrocarbon-refining".

A?vagho?a, vice president of China Petrochemical Beijing Research Institute of Chemical Industry, said that the deep integration of refining and chemical industry is the biggest advantage for private refining and chemical industry to transform into downstream new energy and new materials. This deep integration of refining and chemical industry makes refining and chemical enterprises have more advantages in the direction of "less oil and more oil" and can realize the mutual matching of technology and energy. In addition, the deep refining and chemical integration enterprise has great flexibility and toughness, diversified products and flexible operation, which is also one of the advantages of transforming to downstream new energy and new materials. Private refining and chemical enterprises should take deep refining and chemical integration as their development goal and transformation direction to realize the further development of enterprises.

Secondly, thanks to industrial scale and technological advantages, large private refining and chemical enterprises have outstanding performance in energy consumption and energy efficiency, and will more easily become industry energy efficiency leaders and green benchmarking enterprises. According to the relevant person in charge of Hong Sheng Group, at present, Hong Sheng Group has started part of the research on carbon capture, utilization and storage (CCUS) project to explore the cutting-edge technology of carbon emission reduction and the technical path of long-term zero-carbon production. In September, 20021,Hong Sheng Group and Iceland Carbon Cycle International Co., Ltd. reached a cooperation to build the world's first industrial chain project of carbon dioxide manufacturing new energy materials. The project can recover carbon dioxide from industrial tail gas and produce photovoltaic grade ethylene-vinyl acetate * * * polymer (EVA) resin, which is the core component of photovoltaic panels and will eventually be used for photovoltaic power generation. The design scale of the project is 6.5438+0.5 million tons/year, and the recovered carbon dioxide is equivalent to the emission of 6.5438+5 sets of large petrochemical plants for 6.5438+0 years.

Finally, large refining and chemical enterprises also have considerable advantages in talent and capital. Especially in terms of talents, A?vagho?a believes that both private refining and chemical enterprises and state-owned refining and chemical enterprises have relatively abundant funds, so the importance of talents is further highlighted. Private large-scale refining and chemical enterprises can focus on introducing some high-end talents to help enterprises achieve transformation and development more efficiently.

"Danger" and "opportunity" coexist in the development of new energy and new materials.

From the perspective of capital market, with the deep transformation of product structure to downstream high added value, the valuation of large private refining and chemical enterprises will also be significantly improved.

According to the research report of Guo Jin Securities, the main business of the private refining and chemical sector is still concentrated in the industrial chain of crude oil, p-xylene, purified terephthalic acid, chemical fiber filament and bulk chemicals, and its static P/E ratio is basically 6~ 13 times. With the continuous layout of deep processing projects in the downstream industrial chain by large private refining and chemical enterprises, the end products are expected to gradually change from bulk chemicals to new materials in semiconductor, photovoltaic, new energy and other industries. The average static P/E ratio of industries and companies related to new energy and photovoltaic industry chain is more than 30 times, and the average P/E ratio of optical film and release film is more than 20 times. The lithium battery separator (wet process) industry benefited from the sustained high growth of the downstream industries of lithium batteries. The static P/E ratio of the industry remained at 90 times, and the multiple of P/E ratio was significantly higher than that of the private refining and chemical sector.

From the market demand, the demand for high-end chemical new materials continues to grow. According to the industry report released by Ping An Research, in 2022, new chemical materials will usher in investment opportunities, and large private refining and chemical companies will continue to maintain their leading position in the industry. The report pointed out that under the background of "double carbon", new materials will become the main driving force for the growth of private refining and chemical enterprises. It is expected that ethane cracking will maintain high profit for a long time by virtue of its cost advantage, which is conducive to the layout of the downstream hydrogen energy and new chemical materials business of the industry leader. In terms of new materials, vigorously developing new chemical materials and high-end fine chemicals will be two key tasks during the 14 th Five-Year Plan period. At present, this field is strongly supported by policies and assisted by capital, which is expected to accelerate its development.

In addition, the potential incremental market of the Regional Comprehensive Economic Partnership Agreement (RCEP) and the Belt and Road Initiative, which just came into effect recently, will also drive the development of high-end new materials industry. It can be said that large private refining and chemical enterprises are facing a vast blue ocean of new energy and new materials.

The increase of demand and the reduction of trade barriers not only bring huge imagination space, but also bring actual competition upgrade. The person in charge of Hengli said that in the process of transformation, large-scale private refining and chemical enterprises are facing a structural imbalance of serious product homogeneity and high-end shortage. "Although these are challenges, they are also opportunities. Private refining and chemical enterprises can make efforts in the differentiation, high-end, refinement and high added value of downstream products through breakthroughs in new technologies and new processes, and seek new development highlands. " The person in charge responded positively to the future competition.

Song Yanping is also concerned about competition. "Foreign capital is entering China in an all-round way, laying out and developing new materials, and the industry competition is becoming more and more fierce." Song Yanping said that after foreign-funded enterprises move their production bases to China, they can eliminate the impact of high tariffs, avoid foreign exchange risks, save freight and improve the competitiveness of their products. At the same time, foreign companies can use their R&D capabilities and technological advantages to conduct more targeted R&D and production to meet the needs of downstream markets. With the formal entry into force of the RCEP Agreement and China's active consideration of joining the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), this kind of competition from foreign companies will be more intense, and domestic enterprises will bear greater pressure.

"New energy and new materials are one of the strategic highlands for the world's chemical powers and multinational companies to compete. China's new energy and new materials market is huge, but a large number of cutting-edge technologies in related fields need to be broken. The problem of' stuck neck' is still severe, requiring enterprises to have R&D and production capacity, flexibly adjust industrial demand and respond quickly. " The relevant person in charge of Hong Sheng Group said that the importance of technology in the game of big countries is becoming more and more prominent. The long-term blockade and suppression of China's high-tech by western countries will not change, and it will be more difficult for China to introduce high-end technologies of these new materials. This will restrict the further development of private large-scale refining and chemical enterprises in the field of new energy and new materials.

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2021September 14, Hengli (Yangtze River Delta) International New Material Industry Base Project started in Wujiang District, Suzhou. The total investment of the project is 20 billion yuan, mainly for the construction of high-end functional polyester film and engineering plastics projects with an annual output of 65.438 million tons, as well as R&D, warehousing and marketing centers. After full operation, the sales revenue can reach 50 billion yuan.

202 1 65438+2 2 1, Zhejiang Rong Sheng holding group signed a contract with Zhoushan municipal government for Jintang new material park project. According to the cooperation agreement, the total investment of the project is about 50 billion yuan, and seven chemical industry chain projects and supporting projects will be invested by using the oil refining capacity of Zhoushan Green Petrochemical Base with an annual output of 40 million tons, with an estimated total product volume of 4.5 million tons.

On February 28th, 2002112, Fujian Henghai New Materials Co., Ltd., which was jointly funded by Tongkun Group Co., Ltd. and Fujian Hua Fu Gulei Petrochemical Co., Ltd., held an unveiling ceremony. The company plans to invest in Gu Lei with an annual output of 2.4 million tons of new intelligent functional fibers and 200,000 tons of polyester differential fibers with low elasticity, with a total investment exceeding10 billion yuan.

65438 On October 26th, 2022/KLOC-0, Hengli Petrochemical announced that its subsidiary, Hengli Petrochemical (Dalian) New Materials Technology Co., Ltd., plans to invest about 24 billion yuan to build a high-performance resin and new material project with an annual output of 65.438+06 million tons and a high-performance polyester project with an annual output of 2.6 million tons, so as to further expand downstream to fine chemical new materials.

Recently, Oriental Hong Sheng's acquisition of 0/00% equity of Saibang/KLOC has also attracted great attention from the market. The acquisition marks the formal entry of Oriental Hong Sheng into the field of new chemical materials. Spin is the largest manufacturer of photovoltaic grade ethylene-vinyl acetate copolymer in China. As an important platform for the strategic transformation of Hong Sheng Group, Saibang is promoting the industrial layout of new energy and new materials. After the completion of this transaction, Oriental Hong Sheng formally entered the field of new chemical materials, forming an industrial matrix of "oil refining+polyester+new materials".