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Yuneng Chemical Strives for a Strong Start in the First Quarter Author/Source: Yuneng Chemical Date: 2022-03-10 Clicks: 15 In Jingbian, where the weather is still cold in March, Yuneng Chemical, located on the southern edge of the Mu Us Desert, is making efforts to achieve a strong start in the first quarter. Over the past year, based on the successful trial run at the end of 2020, the Yu Neng Hua project has operated in a safe, stable, and efficient manner, earning it the Group’s Special Contribution Award for Management and Innovation. It is particularly gratifying that its core LDPE/EVA plant operated continuously for 66 days at the beginning of this year, setting a new record for the stable operation of similar plants in China and raising new benchmarks for the group’s green and low-carbon development strategy based on the comprehensive utilization of coal, oil, and gas. Last year, Yulin Energy Chemicals had to ensure the stable, efficient, and optimal operation of the first-phase project, while at the same time overcoming the new bottlenecks and challenges that arose during the project’s development. It was particularly difficult to achieve a synergistic effect where the two phases of the project worked together in such a way that \"1+1>2\". During this period, the company made every effort to overcome various factors that affected the stable operation of the facilities. The quality of production and operation for the first-phase project continued to improve; the yields of dienes from the DCC and DMTO units reached 36.35% and 34.42% respectively, representing increases of 0.62% and 0.27% on a year-on-year basis. These figures were also 0.35% and 0.12% higher than the targets set for achieving first-class performance ； The methanol combined plant operated continuously and stably throughout the year; the catalyst in each reactor produced more than 7.2 million tons of methanol in total, reaching a record high. Meanwhile, the company made full use of the operational experience gained from the first-phase project to carefully organize the trial production phase for the completion and improvement tasks. By implementing technical upgrades to address various issues, it succeeded in eliminating all bottlenecks that affected the stable and efficient operation of the equipment. All units were able to operate at full capacity, with performance levels that surpassed those of similar domestic units during their trial production phases. It took only 6 months to achieve profitable operation, and the equipment successfully passed the 72-hour performance testing conducted by the China Petroleum and Chemical Industry Federation, thus meeting all required standards for operation. The full operational readiness of these projects to meet all requirements has laid a solid foundation for Yueneng Chemical to make full use of the flexibility and resilience of its \"large-scale system\" as well as the production capacity of its facilities; it also provides a strong guarantee for the company to fulfill its annual production targets. At present, our LDPE/EVA production facility is capable of continuously and stably manufacturing EVA materials for use in photovoltaic applications, cables, and foam products. Its operational efficiency is at the leading level in China, and Yueneng Chemical has become the only company in Shaanxi and even the entire Northwest region that can produce high-quality EVA products. It is understood that in 2021, the company focused on advancing the research and development of products for projects aimed at filling gaps in existing technologies. Guided by market demands and economic benefits, and supported by joint laboratories, it made full use of the technical advantages of various production processes. As a result, it developed and produced 13 new polyolefin products, including special materials for non-pressure pipes and high-melting-index polypropylene-butylene copolymer transparent materials. Throughout the year, there were 85 instances of product switching, with a 100% success rate, and the product quality remained stable. At the company-wide level, Yueneng Chemical’s achievements in striving for higher sophistication are even more impressive. Last year, aiming to compete with imported products from abroad, the company successfully developed high-end products such as \"three-high\" polypropylene, EVA foam materials, and EVA specifically designed for solar photovoltaic films. In total, 814,400 tons of such high-end products were produced that year, accounting for 65.61% of the total output of polyolefins in the first phase of production. Among them, EVA foaming materials and EVA specifically designed for photovoltaic encapsulation films have filled the gap in the northwest region, with significant productivity benefits provided by these products ； “The \"three-high\" polypropylene has reached a leading level in China, meeting the standards for replacing imported products. The transition from quantitative accumulation to qualitative leap stems from the company’s relentless pursuit of innovation in polyolefin product development and product quality. The market-oriented research and development results, once promptly put into use, effectively increased the production volume and market competitiveness of mid-to-high-end products. In 2021, faced with multiple pressures such as stricter policies on energy consumption control, soaring raw material prices, and the ongoing impact of the pandemic, Yueneng Chemical focused on the requirements for high-quality development and its strategic goal of achieving excellence. It made every effort to carry out key tasks; throughout the year it produced 1.8567 million tons of polyolefin products. The company achieved sales revenue of 16.011 billion yuan, profits of 1.647 billion yuan, and tax payments of 2.018 billion yuan. It exceeded its production targets for polyolefins by 126,700 tons for the whole year, resulting in an increase in efficiency worth 362 million yuan ； Among them, the projects aimed at filling in gaps generated a total value of 1.246 billion yuan throughout the year, thereby ensuring the company’s ability to achieve growth in profitability despite adverse conditions. To further unlock its potential for efficiency improvement, the company focused on energy conservation and cost reduction, implemented projects to increase revenue while cutting expenses, achieving an efficiency gain of over 80 million yuan throughout the year ； Active efforts were made to localize imported equipment parts and reuse existing materials, resulting in cost savings of 17.05 million yuan ； The projects for generating power from steam waste heat and pressure, as well as the steam recovery system for Line 1 of the methanol production process, were completed; this resulted in energy savings of 16,500 tons of standard coal. The steam waste heat and pressure generation units received a special award of 16.32 million yuan for their contributions to ecological civilization construction ； High-end and mid-range products generated an efficiency gain of 108 million yuan throughout the year. At the same time, taking into account the trends in market prices for primary and secondary products, the company made full use of periods of low demand and maintenance windows to adopt strategies such as \"storing goods during low-demand periods for sale during peak times\" and \"setting price limits to maintain high prices\". These measures resulted in cumulative cost savings of around 14.19 million yuan throughout the year… Ensuring the efficient operation of these projects greatly expanded our company’s polyolefin production capacity. Especially amid soaring coal prices, the company’s profits continued to grow, demonstrating the advantages of comprehensive utilization of coal, oil, and gas resources and further strengthening the foundations for high-quality development. At present, Yueneng Chemical’s polyolefin production capacity ranks among the top in the country. It possesses various processing technologies for manufacturing different types of polyolefin products, and it can flexibly adjust its product portfolio in response to market demands and changes. As of the end of February, the company had produced a total of 333,600 tons of polyolefin products, accounting for 69.72% of the 478,500-ton target set for steady growth in the first quarter. The company’s leadership stated that this year, Yueneng Chemical will persevere in pursuing its \"strive for excellence\" strategy, focusing on enhancing the advantages of operating as a large-scale system, ensuring stable operations and increased production. Efforts will be concentrated on the research, development, and production of key high-performance manufacturing units for PP3 and LDPE/EVA, with the aim of expanding the range of mid-to-high-end products. The company will also explore providing \"one-stop\" delivery services for its main products. The goal is to produce 1.85 million tons of polyolefin products throughout the year, with an effort to reach 1.9 million tons; achieving sales revenue of 19 billion yuan and profits of over 2 billion yuan, thereby contributing further to the stable growth and high-quality development of the group company.