Huachang Chemical: Summary of the 2021 Annual Report

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Huachang Chemical: Summary of the 2021 Annual Report Author/Source: Date: 2022-04-22 Clicks: 26 Huachang Chemical is a comprehensive chemical enterprise whose industrial chain begins with coal gasification. Coal chemical industry is an industry that uses coal as raw material and, through chemical processing, converts coal into gaseous, liquid, and solid fuels as well as chemicals, thereby producing various chemical products. The company’s industrial chain is generally divided into three parts: the first is the basic chemical industry, which uses coal to produce syngas (with CO+H2 as its main components), from which ammonia, urea, soda ash, ammonium chloride, nitric acid, and other products are manufactured ； The second is the chemical fertilizer industry, which uses products produced through coal chemical processing to manufacture new types of fertilizers, etc ； Third is the new materials industry, which uses syngas and propylene as raw materials to produce new types of materials; the subsequent products include alcohols, plasticizers, resins, coatings, and so on. In recent years, the company has been focused on expanding its operations and making strategic investments in the hydrogen energy sector, and the progress of these efforts is in line with expectations. Our company’s coal chemical industry chain is an industry that combines traditional coal chemistry with modern coal chemistry. Our company’s coal chemical industry uses coal as a raw material to produce syngas (hydrogen, carbon monoxide, carbon dioxide). Hydrogen is primarily used in the production of synthetic ammonia, carbon monoxide is used to manufacture polyols, methanol, and other products, while carbon dioxide is used to produce urea, soda ash, and other substances. Our company’s industry is focused on the clean and efficient utilization of coal; going forward, we will prioritize \"carbon neutrality\" by enhancing the use of clean production technologies, optimizing the industrial structure, and achieving energy conservation and emission reduction. Soda ash products. Soda ash is sodium carbonate, commonly known as soda, caustic soda, or washing soda; its chemical formula is Na2CO3, and it belongs to the category of basic chemical raw materials in the form of salts ； Used in industries such as pharmaceuticals, papermaking, metallurgy, glass, textiles, and dyes. Soda ash production processes include the ammonia-soda method, the double-soda method, and natural soda. The process used by our company for soda ash production is the combined alkali process, which utilizes sodium chloride (table salt, industrial salt) and synthetic ammonia (produced from the company’s syngas) as raw materials to manufacture soda ash and ammonium chloride. Process flow: coal – syngas – synthetic ammonia (with sodium chloride and carbon dioxide in the syngas) – soda ash, ammonium chloride. Main business models: direct sales, and use as raw materials for downstream manufacturers. Fertilizer products. Our company’s compound fertilizer is a new type of fertilizer. It is promoted and sold based on a rational ratio of nitrogen, phosphorus, potassium, etc., in conjunction with soil testing and formulation recommendations ； Additionally, in the field of nitrogen fertilizers, our company produces urea and ammonium chloride. Urea production process: coal – syngas – synthetic ammonia (with carbon dioxide added to the syngas) – urea. Compound fertilizer production process: Purchased phosphorus and potassium fertilizers combined with domestically produced nitrogen fertilizer to produce compound fertilizer. Main business models: direct sales, distributor sales. Polyol products. Our company uses coal-derived syngas and purchased propylene as raw materials to produce polyols and neopentyl glycol ； Subsequently, the industrial chain is extended to produce polyester resin. Process flow: Coal – Syngas – Synthetic intermediates (formaldehyde produced by adding purchased propylene and methanol) – Butanol, octanol, isobutyraldehyde, neopentyl glycol. Main business models: direct sales, and use as raw materials for downstream manufacturers. The hydrogen energy sector. The industrial sectors related to hydrogen fuel cell vehicles mainly include: hydrogen production, storage, transportation, and refueling stations; hydrogen fuel cell technology and related components (bipolar plates, proton membranes, and related materials); integration technologies and components for hydrogen fuel engines (such as motors and electronic control systems); and testing technologies and equipment for hydrogen fuel cells. In 2021, the company carried out exploration and expansion in the field of hydrogen energy, mainly in the following areas: (1) Demonstration applications. The 25 bus vehicles developed in collaboration with Jinlong United Automotive Industry (Suzhou) Co., Ltd. and Zhangjiagang Gangcheng Public Transportation Co., Ltd. have been delivered. These buses are 10.5 meters in length and are equipped with HCEA70 hydrogen fuel cell engines manufactured by our company. (2) Status of the hydrogen station project. The hydrogen refueling station built by our company has a capacity of 500 kg/day at 35 Mpa; it is used to fill hydrogen fuel for hydrogen fuel cell vehicles. The project has entered trial production and reached the intended usable state. (3) Status of the hydrogen filling station project. The raw material used in the production of this project is hydrogen. The main process involves purifying the hydrogen obtained through pressure swing adsorption, then pressurizing it with a hydrogen compressor, and finally loading it into high-pressure tank trucks to be delivered to external hydrogen users. The production scale (capacity) of the hydrogen filling station project is: a hydrogen processing capacity of 3*1607 kilograms per day. The project has reached the intended usable state. (4) Independent demonstration of the use of hydrogen fuel cell trucks. The company is actively promoting the use of hydrogen fuel cells in the field of heavy trucks. The progress of the preliminary work in this regard is in line with expectations; it is anticipated that 10 heavy trucks (the first batch) will be delivered and put into operation in the first half of 2022. (5) Status of R&D progress. At present, the stack products of our company’s holding subsidiary, Suzhou Huachang Energy Technology Co., Ltd., have been upgraded to the third generation.