Companies in the liquid carbon dioxide sector are becoming stronger and stronger

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Affected by various factors such as the international financial crisis, the liquid carbon industry (including carbon dioxide capture, recovery, purification, compression liquefaction, and utilization) has seen its market shrink since last September, with many small enterprises still not having resumed operations. However, investigations by journalists have revealed that some large liquid carbon companies, leveraging their scale, financial resources, and technological advantages, have not only been unaffected by the financial crisis but have also grown stronger in spite of it. 'In 2008, we sold a total of 17,000 tons of liquid carbon dioxide, representing a year-on-year increase of 29.4%. The average price of the product increased by 50 yuan per ton on a year-on-year basis, while production and sales volumes reached new highs. In January this year, despite the production shutdowns caused by the long Spring Festival holiday, sales of liquid carbon products still reached over 1,000 tons, marking a successful start to the Year of the Ox. 'Liu Lixin, the manager of the production department at Shaanxi Weihe Kewei Company, told the reporters excitedly. Thanks to the timely adjustment of its marketing strategies and customer base, the company’s business is growing increasingly successful nowadays. According to him, demand for liquid carbon in the market has declined significantly since last September; in particular, the machinery manufacturing industry, which is its largest consumer market, has experienced a sharp downturn, resulting in a more than 40% drop in nationwide demand for liquid carbon on a year-on-year basis. Downstream customers are also more ‘picky’ about product quality and after-sales service, and some small enterprises whose product quality and after-sales service fail to meet the standards have been eliminated. Leveraging its advantages such as high product quality and advanced technology and testing equipment, Weihe Kewei Company has taken the opportunity to expand into surrounding markets such as Inner Mongolia and Ningxia. Last October, they also signed a long-term supply and sales contract worth 1,500 tons per year with a company in Inner Mongolia, raising the proportion of products sold outside the region from less than 30% to over 45%. At the same time, sales of its products in the food and beverage processing sector were also consolidated and saw a slight increase, ultimately leading to strong growth last year and a positive start this year. Dong Yaohui, general manager of Shaanxi Xinghua Xinke Co., Ltd., told reporters that the financial crisis had a very limited impact on the food industry, and 80% of Xinke Company’s products are used in the fields of beverages and food additives. Therefore, the financial crisis had no negative impact on it. 'Since the original production capacity of 30,000 tons per year was insufficient to meet customer demand, last June we invested 5 million yuan to build a facility with a capacity of 20,000 tons per year, raising the company’s liquid carbon production capacity to 50,000 tons per year. Currently, both units are operating at high loads of over 90%, and product sales are proceeding smoothly. 'Dong Yaofa said to the reporters happily. Henan Nanyang Tianguan Carbon Dioxide Co., Ltd. and Jiangsu Huayang Liquid Carbon Co., Ltd. have achieved steady business expansion by tapping into emerging markets such as carbon dioxide-based oil displacement and the production of biodegradable plastics from carbon dioxide. In October 2007, Henan Tianguan Group successfully put into operation its production line for manufacturing biodegradable plastics from carbon dioxide at a capacity of 5,000 tons per year, thereby opening up new markets for the liquid carbon products produced by its subsidiary, Nanyang Tianguan Carbon Dioxide Co., Ltd. Because about 0.43 tons of carbon dioxide are required to produce one ton of biodegradable plastic, a production line capable of manufacturing 5,000 tons of such plastic per year can help the company reduce its carbon dioxide emissions by over 2,000 tons per year. Meanwhile, the breakthrough in carbon dioxide injection flooding technology achieved through the collaboration between Nanyang Carbon Dioxide Company and Zhongyuan Oilfield Company has opened up another market for the company. Driven by two new areas of consumption – plastic degradation using carbon dioxide and oil extraction using carbon dioxide – in 2008, Nanyang Company’s sales of liquid carbon products reached a record level of over 60,000 tons, an increase of 10,000 tons compared to the previous year. The 20,000 tons per year liquid carbon plant in Luohe City was also put into operation successfully, increasing the liquid carbon production capacity to 80,000 tons per year. 'Guo Yongzhong, general manager of Nanyang Tianguan Carbon Dioxide Co., Ltd., told reporters. An Wenyong, manager of Jiangsu Huayang Liquid Carbon Co., Ltd., told reporters: ‘At present, oil fields in the three northeastern provinces have all adopted this technology.’ Based on the calculation of injecting 100 tons of liquid carbon per oil well, if half of the oil wells across the country use carbon dioxide for oil displacement in the coming years, the annual consumption of liquid carbon products will amount to millions of tons. At present, the total annual consumption of liquid carbon products across the country is only 1.4 million tons, and a situation of supply falling short of demand is highly likely to arise by then. Therefore, Sinopec East China Petroleum Bureau, the higher-level authority of Huayang Company, has taken proactive measures by establishing a 100,000 tons per year liquid carbon production facility in Jilin. This facility uses high-quality carbon dioxide sourced from the abundant reserves in the Wanjinlu carbon dioxide field in the Songliao Basin to produce high-purity liquid carbon products. The products produced at the Jilin facility are widely used in oil fields across the three northeastern provinces, as well as in beverage and food processing enterprises, with a local market share of over 40%. The second phase of Huayang Company’s project in Jiangsu, which is currently under construction, will come online in the second half of this year. By then, the company’s production capacity for liquid carbon will reach 800,000 tons per year, making it the largest supplier of liquid carbon products in China and even in Asia. Its influence and competitiveness will surely increase significantly. ' Sun Guomin, secretary-general of the China Industrial Gases Association, said in an interview with reporters that nationwide, the impact of the financial crisis on the liquid carbon industry has been evident since last October; currently, the national liquid carbon market has shrunk by more than 40%. However, with the successive introduction of revitalization plans for industries such as equipment manufacturing, petrochemicals, and automobiles, as well as the implementation of projects aimed at boosting domestic demand worth 4 trillion yuan, it is believed that these industries will recover soon. The consumption of liquid carbon in these three sectors accounts for over 70% of China’s total liquid carbon production. Coupled with the strong demand for liquid carbon products in the beverage and food processing industries, the liquid carbon market is likely to see a rebound in the near future. Even more encouraging is that, having gone through the financial crisis, relevant enterprises are paying more attention to product quality, technological advancement, and market development. Market share is concentrating among the more competitive firms, which is highly beneficial for improving the overall quality and technical standards of the industry as well as promoting its healthy development. This post was last edited by Zhenzhen Youci on 2009-3-3 19:01.]