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Lu’an Chemical Improves Efficiency and Breaks Through Barriers Author/Source: Lu’an Chemical Date: 2022-02-21 Clicks: 15 As a key player in driving the transformation and development of the chemical industry in the province, Lu’an Chemical Group needs to achieve comprehensive high-quality development, and the 180 projects play a crucial role in helping the company overcome financial difficulties. Since 2021, the group has strived to reach the advanced levels seen in industries such as Yitai and Ningmei’s coal-to-oil projects, accelerating efforts to develop key core technologies, optimizing process routes and plant designs, and improving the scientific and efficient nature of production operations. By taking various measures to reduce production costs, significant results have been achieved. Last April, adhering to its \"1135\" management philosophy and focusing on its responsibility for overcoming difficulties and achieving transformation, the coal-based clean energy company compared itself with Yitai and Ningmei, studied the possibility of using local coal for combustion, and took solid steps forward in the transformation process of the 180 project. On May 9, 2021, the first gasification furnace was ignited, marking a successful start to the commissioning process; the system operated stably. Qualified oil products were produced on May 15, and by June 5, all four gasification furnaces were operating at full capacity. The entire production process was completed within 28 days. In July, the average daily output of the four gasification furnaces was 3,207 tons, with a maximum daily output of 3,280 tons – the highest level ever recorded since the system went into operation. In August, the qualified rate of the blended finished coal produced at the coal storage and blending center reached 95.71%, an increase of 8.27% compared to the previous month. In September, the effective load on the coal blending line reached 81.6%. Compared to the coal blending volume in August, the belt operation time has been reduced by 89 hours this month, resulting in a savings of 42,000 kWh in electricity consumption. This is the report card submitted by the solid storage and transportation plant. From using coal and gangue in the past, to shifting to a reliance on domestic coal while also utilizing coal from Shaanxi and Inner Mongolia, the coal consumption per ton has decreased significantly. With the help of coal storage and distribution centers that enable precise coal mixing, coal consumption per ton continued to fall, reaching its lowest level on record in July. This is the result of the joint efforts of the production technology department. In an effort to turn losses into profits, coal-based clean energy companies are making continuous efforts to reduce staff numbers, improve efficiency, and adopt lean management practices. The human resources department reduces labor costs through optimization and replacement. Since last year, through measures such as job optimization, workforce replacement, and reduction of temporary workers, a total of 335 full-time employees and 41 temporary workers were laid off. Additionally, 51 employees were reassigned to positions with staffing gaps or to outsourced service roles. As a result, the total number of employees decreased by 1,061 compared to the end of 2020, resulting in cost savings of 79.6 million yuan. The business management departments are focused on improving management efficiency. Taking the Production Technology Department as an example, by optimizing the department structure, the dispatch room, the production department, and the technology department have been merged; issues that previously required coordination among multiple departments can now be resolved in one go ； Strengthen performance orientation by linking individual income to the overall performance of the company as well as the performance of their respective departments and factories ； All employees are also encouraged to participate, with monthly reviews focused on value creation, during which suggestions and opinions are submitted. 311 of these suggestions were put into practice, resulting in a total value creation of over 100 million yuan. Throughout 2021, a reduction of 584 million yuan in losses was achieved, representing a decrease of 17.9% ； Operating revenue reached 3.683 billion yuan, exceeding the planned figure of 3.059 billion yuan by 624 million yuan, representing a growth rate of 20.4% ； Production reached 630,000 tons, which is 100,000 tons more than the planned 530,000 tons, representing an increase of 18.9% ； Sales volume reached 638,000 tons, achieving balance between production and sales, with a 100% qualification rate for products leaving the factory. Over the past year, Coal-Based Clean Energy Company has made innovation the driving force behind reducing costs and increasing efficiency. Taking raw coal as an example, they have developed solvents that have enabled the local sourcing of this raw material, opening up new opportunities for Luanan Coal and potentially turning it into a new source of profit. Especially amid the severe fluctuations in the coal market in 2021, the successful use of local coal significantly reduced the cost of coal used in boilers. Controlling raw material costs, making full use of various raw materials, and achieving maximum economic efficiency are among the key ways to overcome losses and difficulties. Wang Lijun, the director of the Solid Fuel Storage and Transportation Plant, explained, “Previously, the coal storage and distribution center had to entrust specialized agencies to carry out the mixing of solvents, which was very costly.” Since January of this year, coal-based clean energy companies have met the blending standards; the blending is carried out by coal storage and distribution centers, which allows for a reduction of 300 yuan per ton. Just this alone can result in cost savings of tens of millions per month, representing significant benefits. ” Only those who innovate are strong. The Fertile Synthesis Plant actively responded to the group’s call, carrying out extensive efforts in various areas of optimization and technical upgrades. “As the core equipment in a Fischer-Tropsch synthesis plant, the circulating heat exchange separator serves primarily to separate the heavy oils from the high-temperature oil gas. To address complex technical challenges such as the inability to effectively separate heavy oils and other related issues. We have optimized the equipment in our FTO synthesis plant. ”Ma Xiaohui, the deputy plant manager at the FTO synthesis plant of the coal-based clean energy company, told the reporters. “By the end of 2021, after the renovation was completed, the gas consumption dropped from 5800 Nm3 to 5576 Nm3, allowing for an increase in oil production of 200 tons per day. ” In the coal chemical industry, the cost of coal is the largest component among the variable costs; in coal-to-oil projects, the daily cost of coal accounts for over 80%, and nearly 90%, of the total variable costs. Since its trial production began in 2017, Coal-Based Clean Energy Company has successively tested mixed combustion using binary coal combinations of injected coal and Shaanxi-Mongolia coal, as well as tertiary coal combinations of local high-sulfur coal and purchased coal. Last year, successful single-firing of blended coal was achieved – starting with the addition of coal from Shaanxi and Inner Mongolia, and moving on to single-firing of Lu’an coal. To date, more than a dozen coal utilization schemes have been developed, all of which are suitable for use in Shell gasifiers and help to optimize the cost of coal fed into the furnaces. “The Production Technology Department, in light of changes in the coal market, promptly selects the optimal coal usage plan to ensure that coal costs are kept as low as possible. ”Yang Long, deputy head of the Production Technology Department, told reporters: “Going forward, the Production Technology Department will start by adding high-sulfur coal to the gasification furnaces and using medium-sulfur coal and high-sulfur coal in boilers, in order to further improve and optimize the coal usage strategy and reduce coal costs.” ” Taking advantage of the maintenance period, the Production Technology Department carries out optimizations, technical upgrades, as well as inspections and repairs for the problems that have emerged in the system since trial production began, as well as for the defects in the equipment and facilities. In terms of power savings, the amount of power generated internally is increased, and the level of self-generated power is adjusted in a timely manner based on changes in the price of electricity purchased from external sources, thereby achieving the optimal operating conditions and reducing the reliance on purchased electricity. Additionally, through process optimizations within the facility, nitrogen compressors and fuel gas compressors have been put into use, which helps to save around 200,000 kWh of electricity per day. In terms of water conservation, improvements and optimizations were carried out to address various imbalances and design flaws in the water system; the mucus that could not be recovered on site, as well as the wastewater from the rainwater drainage system, were modified through technical upgrades, enabling full recovery of such water. In terms of energy utilization, the vented exhaust gases are used as fuel in boilers, and the flare gas is utilized as fuel as well; at the same time, a portion of this flare gas is recovered and sold to nearby downstream facilities. This approach not only helps to address the issue of waste gas emissions but also generates tangible benefits. “This year, we plan to carry out parking maintenance in the first half of the year. Taking this opportunity, we will address in a focused manner some of the bottleneck issues that affect the system’s operation under high loads, as well as certain defects that have been identified during current operations. After the system maintenance is completed, the coal consumption, water consumption, electricity consumption, and gas consumption per ton of oil produced will be further reduced. ”said Yang Long, deputy head of the Production Technology Department. “Over the course of ten months, Secretary Lin Wu visited the coal-based clean energy company on two occasions to conduct inspections. This time in particular, he went to the coal storage and distribution center, the FTO synthesis facility, and the dispatch control center, to gain a detailed understanding of the innovations related to our raw coal, the optimizations in production processes, as well as the progress made in transforming the project to overcome challenges and improve efficiency. He also provided guidance on our work. ”Hu Xianxian, General Manager of Coal-Based Clean Energy Company, is not only deeply moved but also feels a great sense of responsibility. “We will adhere to the guidance of **Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era**, earnestly implement the provincial party committee’s ‘32-word’ requirements for deepening reforms, improving quality, and enhancing efficiency in state-owned enterprises. We will further promote the ‘cost-accounting’ culture guided by the group’s lean management philosophy, closely benchmark against advanced domestic enterprises in the same sector, continuously strengthen the level of refined enterprise management, tap into internal potential, and stimulate internal drive, striving to achieve full recovery from losses at the earliest possible time. ”