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Dongguang Chemical: Seeking Progress while Maintaining Stability for Quality Development. Author/Source: Sinochem New Network. Date: 2022-03-22. Clicks: 3. Since 2021, due to the ongoing impact of the COVID-19 pandemic, the economic situation both domestically and internationally has been severe and complex, resulting in significant disruptions to the production and operations of many enterprises. The coal chemical industry, in particular, is facing unprecedented challenges due to a combination of factors such as the pressure exerted by environmental protection policies. As a traditional coal chemical enterprise founded in 1970, Hebei Dongguang Chemical Co., Ltd. remains committed to its mission of serving the country through industry development, striving to create an ecological and green chemical enterprise. Despite the complex and challenging economic conditions, it has delivered outstanding results. In 2021, Dongguang Chemical produced 746,000 tons of synthetic ammonia and 1.15 million tons of urea, representing year-on-year increases of 3.47% and 4.36% respectively ； Total sales revenue reached 3.815 billion yuan (including subsidiaries), representing a year-on-year increase of 60.5% ； Tax payments amounted to 176 million yuan, a year-on-year increase of 220% ； The average monthly salary of employees increased by 13% year-on-year. Focusing on its core business to improve quality and strength, and remaining stable in difficult circumstances, Dongguang Chemical has always adhered to its foundation in the fertilizer industry. It has moved forward step by step, avoiding attempts at excessive scale or rapid growth, instead focusing on excellence and refinement. This approach has enabled it to develop the small fertilizer plant that began production in 1970 with an annual capacity of 3,000 tons of synthetic ammonia into one of the top 20 companies in China in terms of urea production. In particular, with the successive commissioning of urea production projects with capacities of millions of tons each, the company reached a new level every year: its annual urea production capacity increased to 1.2 million tons, and its total asset value rose to 3 billion yuan, enabling it to join the ranks of enterprises that produce millions of tons of urea per year. The overall strength of the enterprise has improved, with its market competitiveness and risk resistance further enhanced. Since June 2021, the price of coal, the raw material used in the fertilizer industry, has started to rise sharply. Last June, the average price of raw coal fed into the furnaces at Dongguang Chemical was 1,340 yuan per ton, representing a 70% increase compared to the previous year ； Last October, the average price per unit fed into the furnace was 2,430 yuan, representing a 187% increase on a year-on-year basis ； Last November, the price of raw materials entering the production process reached 2,470 yuan; the cost of synthetic ammonia was close to 4,000 yuan, while the cost of urea was around 2,800 yuan. At that time, the price of methanol was about 2,500 yuan and the price of urea was 2,550 yuan, resulting in losses of around 1 million yuan per day for these enterprises. Fertilizers are special commodities related to **food security**. Since August 2021, various departments including the National Development and Reform Commission have issued multiple notices calling for stable production and supply of fertilizers, and have instructed local authorities to establish special teams responsible for coordinating fertilizer production in order to ensure a stable supply of these chemicals. Dongguang Chemical remains committed to its original goal of contributing to the development of the industry through national service; it makes every effort to ensure stable and high levels of production. It has also entered into strategic partnerships with companies such as Sinograin Group, fostering comprehensive cooperation that spans everything from the supply of raw materials at the upstream stage and the production of finished products, to logistics and distribution at the downstream level. This approach has contributed to ensuring a stable supply of fertilizers in China. In an environment characterized by rapid market changes and continuous turmoil, a company’s ability to remain stable and secure is thanks to the solid foundation it has built over the years by focusing solely on its core business and striving to strengthen it, which enables the company to possess strong market competitiveness and resilience in the face of risks. Strengthening internal capabilities and unlocking managerial potential – A company’s profitability stems from reducing expenses and increasing revenue. To achieve cost reduction and efficiency gains, Dongguang Chemical continues to focus on improvement in management, establishing a top-down, detailed management system that ensures that the goals of cost reduction and efficiency improvement are deeply ingrained in everyone’s mindset, becoming spontaneous actions on their part. To reduce costs, the first step is to handle the coal issue properly. The raw coal used in Dongguang Chemical is anthracite. As a company that is neither located in coal-producing areas nor has its own coal resources, Dongguang Chemical faces many constraints in terms of the supply of raw coal. Raw coal accounts for about 60% of the production costs of urea; in order to reduce costs, ensure survival, and achieve growth, it is essential to firmly control this key raw material – coal. Through trial and error, Dongguang Chemical has established a coordinated mechanism that integrates procurement, processing, and production feedback, creating a closed-loop management system. This ensures that the coal supplied to the plant meets the production requirements, and that coal processing is tailored to the needs of production, thereby achieving cost reduction and improved efficiency. In terms of coal procurement and transportation, Donghua Company adheres to sourcing from a wide range of suppliers, employing flexible transportation methods, and implementing detailed management. In terms of supply channels, in 2021, Dongguang Chemical built on a stable railway transportation supply system by establishing new direct procurement channels for high-quality anthracite, while continuing to rely on both road and rail transportation as two parallel approaches. Depending on various external market conditions, the company balances different supply channels and flexibly controls the proportion of different coal types purchased, such as by type of coal, lump size, and sulfur content, in order to achieve the best cost-effectiveness for use in boilers. To ensure the quality of coal entering the plant, Dongguang Chemical has improved its coal quality inspection system by adopting advanced intelligent detection systems and ERP systems. It implements full-process supervision across all stages, including measurement upon arrival, sampling, sample preparation, quality inspection, re-inspection, and pricing, thereby ensuring that each stage checks and oversees the previous one and addressing any potential gaps in coal management. In terms of coal blending, Dongguang Chemical has standardized the procedures for issuing instructions regarding the mixing of different types of raw coal, and it keeps track of changes in process parameters under various blending ratios. By relying on objective data, it ensures proper mixing of raw coal, thereby helping to maintain stable or even decreasing levels of raw coal consumption and production costs. Between September and October 2021, coal prices soared and supplies of coal became scarce. In the face of drastic market changes, Dongguang Chemical has always remained sober and calm. On October 20, 2021, after the purchase price of anthracite at certain coal mines exceeded 3,200 yuan, the company made a decisive decision to firmly resist purchasing coal at such high prices and to strictly control the volume of purchases, keeping it at a level sufficient to meet production needs. By November 1 of last year, when the price in the mainstream market started to drop back below 3,000 yuan per ton at the factory level, the company had already reduced its actual purchasing price to under 2,200 yuan per ton, thereby minimizing the losses incurred by the company due to the sharp decline in coal prices at the beginning of November last year. To reduce costs, starting with small things – Dongguang Chemical focuses on achieving efficiency through better management, continuously carrying out activities to increase revenue and cut expenses, and reinforcing among all employees the concept of saving every drop of water, every unit of electricity, and every sheet of paper ； Adhering to the principle that \"stable production is the greatest benefit,\" efforts are made through improved management to ensure high levels of expertise among personnel, high operational standards, maximum equipment utilization and efficiency, as well as strict control of process parameters to achieve the best possible results. This enables the entire system to operate for extended periods in a safe, stable, and efficient manner ； Through measures such as scheduled maintenance, regular upkeep, and planned overhauls of the equipment, it has been possible to avoid any major shutdowns for over 20 years – with the only exceptions being new projects or situations where the replacement of several catalysts required a prolonged shutdown. As a result, the plant was able to operate for 355 days or more each year on average, which saved a significant amount of money on maintenance costs and helped to keep production expenses under control. The company focuses on internal improvements, starting with small matters, and adheres to the principle that \"what is saved is what is earned.\" By improving systems and mechanisms, strengthening oversight of the coal, coal-related industries, and electricity sectors, maintaining production balance, carrying out technological upgrades, and fully utilizing the potential of processes and equipment, the company continuously reduces its production costs. By optimizing the processing procedures and conducting careful operations, the company strictly controls the residue rate, keeping it at 5%–6% after the combustion of raw coal, thereby improving the efficiency of coal utilization. Starting in January 2021, the company attempted to use lump coal for single-furnace combustion in its branch plants. Through numerous adjustments to the process parameters, stable furnace operation was achieved, with less residual carbon in the ash produced. The consumption of raw coal per ton of ammonia produced decreased by about 10 kilograms compared to the previous year, which also created favorable conditions for other gas generation furnaces that use smaller coal particles. The company invested approximately 5 million yuan to conduct a comprehensive review and optimization of the water management system across the entire plant. By analyzing in detail the water quality requirements of each unit, it carried out coordinated scheduling and adjustments, ultimately achieving the segmented, hierarchical use of water as well as its recycling. It also ensured that wastewater was separated into clean and polluted streams, with further treatment applied to the polluted waste. This approach resulted in a scientific and rational dynamic water balance for the whole plant. Technical upgrades were implemented for the concentrated wastewater recovery systems, as well as improvements to the reclaimed water reuse systems. Among them, after the renovation of the concentrated brine recovery unit, the emission of concentrated brine is reduced by over 75%. The water that has undergone final treatment of wastewater is processed through reverse osmosis for reuse as reclaimed water, which is then used to replenish the circulating water system, achieving a recovery rate of over 50%. Dongguang Chemical implemented modifications to the intercooling injection gas in its two production plants, replacing the carbon dioxide gas previously used for this purpose with other gases. After the modification, the effects were significant: the quality improved markedly, and the carbon dioxide content in semi-water gas decreased by about 0.8%. This not only helps to increase urea production but also reduces system resistance; it allows for approximately 20,000 kWh of electricity to be saved per day, resulting in annual savings of around 4 million yuan for the enterprise. Improving efficiency: The circular economy and green development are yielding positive results. Over the years, Dongguang Chemical has integrated the concept of green development into every aspect of its production and management processes. By adopting advanced management models and implementing stricter safety and environmental protection measures, as well as by advancing the construction of an ecological circular economy, it has created a **green factory**, achieving a win-win situation in terms of both ecological and economic benefits. Since 2019, Dongguang Chemical has taken the lead in assuming its responsibilities; it invested 170 million yuan to implement, ahead of other companies in the country, a project for integrated environmental protection treatment of multiple pollution sources using fixed-bed gasifiers. By November 2020, this project was fully operational, having passed the inspections carried out by relevant government departments and industry associations. Its performance and all related indicators met the environmental protection and safety standards, setting a model for environmental upgrades using fixed-bed gasifiers across the entire industry. The implementation of this project not only brought significant environmental benefits to the enterprise but also improved its productivity, providing a solid foundation for its business operations. Dongguang Chemical has adopted and thoroughly implemented the clean production management model, transformed its production methods, and expanded its industrial chain by applying the principles of circular economy. By making full use of intermediates, by-products, and waste materials, it has reduced production costs, significantly cut energy consumption and emissions, and turned these resources into benefits for the company. Dongguang Chemical can utilize resources such as hydrogen and methane contained in the exhaust gases from its ammonia synthesis plants; through hydrogen extraction and pre-recycling processes, it is able to produce 10,000 tons of LNG per year ； Concrete blocks are produced by subjecting industrial waste, namely fly ash, to a simple processing procedure. This enhances the added value of waste generated in the ammonia synthesis industry, and helps reduce solid waste emissions by over 100,000 tons annually ； When upgrading the flue gas treatment system of waste gas incineration furnaces, waste ammonia water is used to convert sulfur dioxide into high-quality ammonium sulfate fertilizer, turning waste into a resource; 15,000 tons of ammonium sulfate can be produced each year ； Cogeneration is carried out using the high-temperature and high-pressure steam generated during the ammonia synthesis process, generating 360 million kWh of electricity annually from the waste heat and pressure. Since 2013, the company has provided heat for the heating project in the urban area of Dongguang County free of charge, by utilizing its industrial waste heat and excess heat. Currently, the company supplies heating to 68 residential areas and 3 schools in the urban area, covering a heating area of 3 million square meters and benefiting approximately 100,000 people. This has helped to establish a good reputation and image for the company, as well as generating positive social impacts. In particular, the liquid carbon dioxide recovery plant with an annual production capacity of 150,000 tons, which came online in 2011, employs a combined process of catalytic oxidation dehydrogenation purification and distillation to recycle the PSA decarburization off-gases from ammonia synthesis units, thereby preventing carbon dioxide emissions at the source. Based on calculations using data related to carbon capture, utilization, and storage, the company’s project for producing 150,000 tons of liquid carbon dioxide per year can result in a reduction of around 80 million cubic meters of carbon dioxide emissions each year. This is equivalent to the carbon dioxide emitted by burning 60,000 tons of standard coal, or it’s the same as if 100,000 economy cars were not used for one year, or as if 1.35 million trees were planted. Based on typical standards for economic forest cultivation, this is also equivalent to the amount of carbon dioxide that could be absorbed by trees grown on 6,500 acres of land. Against the backdrop of achieving carbon peak and carbon neutrality, the company adheres to the new development concept and takes proactive steps, making significant contributions to the critical period and window period for reaching the carbon peak during the 14th Five-Year Plan period. The semi-water gas desulfurization facility is arranged in an advanced manner to create new sources of growth; while strengthening its core business, the company has actively expanded its industrial chain in the fertilizer sector, successfully launching a range of differentiated products such as peptide urea and large-grain urea. Since 2019, leveraging its own urea resources and advantages in utility facilities, the company has planned and implemented a project to produce 500,000 tons of vehicle urea per year. The first phase of this project, which involves the production of 300,000 tons of vehicle urea solution per year, was successfully put into operation in December 2019, reaching full production capacity and efficiency. In 2021, the sales revenue generated from vehicle urea exceeded 300 million yuan, with taxes paid amounting to 15 million yuan. That same year, the company planned and implemented a project to produce 150,000 tons per year of new types of high-efficiency, specialized compound fertilizers; this project was completed entirely, and on February 11, 2022, the plant started operating successfully after a single trial run, producing qualified products. This led to an additional annual sales revenue of around 400 million yuan, additional tax revenues of 10 million yuan, and the creation of over 60 new jobs. After more than 50 years of development, Dongguang Chemical values even more the hard work of several generations; it understands all too well that success is achieved through effort, and that the driving force behind such effort lies in mission and responsibility. The entire company will keep its original aspirations and mission in mind, maintain high morale, overcome challenges, and build a new Donghua that is safer, more efficient, greener, and capable of higher-quality development!