Hualu Group moves forward against the odds; its ethylene glycol technology upgrade and oxalic acid project generates an additional 25 million yuan in revenue per month!

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Hualu Group moves forward against the odds; its ethylene glycol technology upgrade and oxalic acid project generates an additional 25 million yuan in revenue per month! Author/Source: Yahu Coal Chemical Industry Date: 2020-08-27 Clicks: 4 The COVID-19 pandemic has posed unprecedented challenges to the global economy. Hualu Holding Group Co., Ltd. (hereinafter referred to as “Hualu Group”) has done an excellent job in implementing the strategies of “six stabilities” and “six guarantees,” achieving remarkable results in maintaining production and ensuring employment. It is reported that in the first half of 2020, the company achieved a total profit of 1.484 billion yuan, accounting for 74.2% of the annual budget ； The net profit attributable to the parent company was 396 million yuan, accounting for 77.9% of the annual budget. Maintaining production and ensuring employment: daily production of drugs for epidemic prevention and control has increased by 30%. After the outbreak of the pandemic, the Party committee of Hualu Group and its various subsidiaries promptly established leadership teams for handling COVID-19 prevention and control efforts, thereby creating an efficient mechanism for addressing such issues. During the Spring Festival, Xinhua Pharmaceutical and LuKang Pharmaceutical, which are part of the group, focused their efforts on producing drugs that are urgently needed for epidemic prevention and control. Multiple drug production lines operated around the clock, with key production processes shifted from two-shift to three-shift operation to ensure that the machines kept working while workers took breaks; as a result, the daily production volume of drugs related to epidemic prevention and control, such as prednisone acetate tablets, increased by 30%. “Prednisone acetate tablets are primarily used for allergic and autoimmune inflammatory diseases; previously, they were mainly employed for allergic conditions such as severe bronchial asthma, as well as diseases that respond to adrenocortical hormone therapy. Since it was also used for epidemic prevention and control this time, to ensure the supply of such drugs, our production lines operated on three shifts, which led to a significant increase in output. ”A relevant official from Hualu Group explained. Of course, the prerequisite for proper production is having the right talent in place. Hualu Group earnestly implements the decisions and arrangements put forward by ****, the State Council, as well as the provincial Party committee and provincial government regarding job stabilization. By taking various measures and adopting a multi-pronged approach, it provides solid talent support for enterprises to resume operations and carry out production and business activities, while also making concerted efforts to expand recruitment channels. “By enabling college graduates to leave campus and enter enterprises through the internet, they are able to see not only the recruitment sites but also the production facilities of those enterprises. ”Fan Jun, Secretary of the Party Committee and Chairman of Hualu Group, said. Through a series of \"cloud recruitment\" measures such as online presentations, remote interviews, and online contract signing, it was possible to continue with recruitment efforts without interruption despite the pandemic. To date, a total of 526 people have been recruited, including 2 academicians and 87 individuals with master’s degrees or higher, as practical steps taken to ensure job stability and to attract and retain talent. To expand sales and secure funds, the group issued 1 billion yuan worth of 3-year pandemic bonds. It is reported that, amid a severe surplus of supply in the market and increasing competition, the core products of Hualu Group maintain a high level of market competitiveness. Hualu Hengsheng continues to intensify its market development efforts; over 90% of its products are sold directly to customers. Its market share in DMF and trimethylamine remains above 30% and 49% respectively, allowing it to maintain its leading position in the industry. In the first half of the year, the sales volume of key products increased by 2.14% on a year-on-year basis; the sales volume of Xinhua’s active pharmaceutical ingredients rose by 10.7%. For Lukang Pharmaceutical, the sales volumes of active pharmaceutical ingredients and veterinary drugs increased by 31% and 7.63% respectively on a year-on-year basis. Based on the characteristics of different product markets, Hualu Group actively adjusted its marketing strategies and tactics, achieving phased goals of stabilizing sales volume, maintaining market share, and improving profitability; meanwhile, its exports experienced growth against the trend. In the first half of the year, export products generated sales revenue of 1.98 billion yuan, a 9.3% increase on a year-on-year basis. Among them, Xinhua Pharmaceutical earned 174 million US dollars in foreign exchange from exports, representing a 11.9% increase compared to the previous year. The first phase of the Modern Medical International Cooperation Center has passed the FDA certification with zero defects; the Xinhua brand ibuprofen tablets, registered in the United States, have had their validation batches and registration batches produced. The acetaminophen tablets and aspirin tablets manufactured by the Xinhua Bailigao joint venture have entered commercial production. By continuing to focus on the \"Internet + healthcare\" sector, promoting international cooperation, and accelerating strategic partnerships across various fields, the company achieved revenue of 208 million yuan, a year-on-year increase of 184%. At the same time, Hualu Group has thoroughly assessed the potential difficulties and risks that the pandemic may pose to its business, including disruptions in upstream and downstream supply chains, delays in deliveries and payment terms, as well as obstacles to foreign trade activities. It takes advantage of the benefits offered by financial policies by seeking bank credit and expanding financing channels, thereby effectively implementing measures to stabilize the financial sector. A successful issuance of 1 billion yuan in 3-year pandemic bonds with a coupon rate of 2.97% was achieved, setting two records: the lowest interest rate for such bonds issued by non-financial enterprises in the province during that period, and the lowest rate among local state-owned enterprises that issued bonds for pandemic prevention and control. This resulted in savings of over 53 million yuan in financial costs ； Carry out two cross-border RMB two-way fund pool transactions with a total amount of 20 million ； Initiated the issuance of a 1.3-billion-yuan ultra-short-term financing bond project. As of the end of June, the group’s overall financing cost was 4.18%, a decrease of 33 BP from 4.51% at the end of 2019. Improve efficiency and boost domestic demand: Save energy and reduce consumption through process technology innovation. Faced with significant factors that reduce profits such as falling product prices, the companies under Hualu Group have carried out initiatives aimed at reducing five aspects of costs while increasing five other aspects, in order to maintain a competitive advantage based on low costs. Through technological innovation in ethylene glycol processing, Hualu Hengsheng’s 100,000-ton/year oxalic acid production facility came online at the end of May; it generates an additional revenue of 25 million yuan per month and a profit of over 10 million yuan per month. The 500,000-ton/year ethylene glycol production plant has become the most cost-competitive facility in the coal chemical industry. At the same time, efforts were made to reduce energy consumption and lower costs by 151 million yuan, enabling the company to once again win the title of \"Leader in Energy Efficiency\" for key energy-consuming industries in 2019. At the end of June, the proportions of Hualu Group’s sales expenses and administrative expenses to its revenue were 5% and 3%, respectively, a decrease of 1.9 and 0.1 percentage points compared to the end of 2019. Meanwhile, Hualu Group continues to increase its investment in research and development to build momentum for future growth. Following a significant increase of 34.64% in R&D investment in 2019, R&D spending in the first half of the year amounted to 512 million yuan, representing a year-on-year increase of 10.71%. In the first half of the year, the group had 5 varieties and 7 product specifications that passed the consistency assessment, placing it among the top in the province in terms of this figure ； A total of 4 various production permits, 3 veterinary drug certificates, and 34 authorized patents were obtained ； The Provincial Institute of Environmental Sciences has completed the approval process for the relevant projects under the **Key R&D Program, and task sheets have been issued for them. The major scientific and technological research project undertaken by Lukang Pharmaceutical in collaboration with the Tianjin Institute of the Chinese Academy of Sciences has also had its task sheet submitted. It is reported that this year represents the highest level of investment in Hualu Group’s history, with plans to invest 5.424 billion yuan. The project to improve the quality of purified adipic acid at Hualu Hengsheng, as well as the projects related to new amide and nylon materials, and the projects involving specialty active pharmaceutical ingredients and related products at Xinhua Pharmaceutical’s Shouguang facility, were included among Shandong Province’s key construction projects for 2020. To date, all 8 projects of Hualu Group have been included in the first batch of priority projects or key provincial projects in Shandong Province’s database for the transformation of old and new economic drivers, with a number of these projects already completed and put into operation.