Still working on the acetate project?
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Online reports: On February 18, Kailuan Group signed framework agreement on coal chemical project investment with ** in Ordos City and ** in Jungar Banner. The agreement includes a project to produce 400,000 tons of formaldehyde per year, a project to produce 40,000 tons of polyformaldehyde per year, and a project to produce 400,000 tons of acetic acid per year. Question for discussion: Can the acetic acid production project still be profitable under the current economic conditions? How is acetic acid transported when it is produced in Inner Mongolia? Which company’s acetic acid production technology is being used?
It might be Wu Jing’s technology or that of the Chinese Academy of Sciences; no other technologies are being transferred.
The construction period for acetic acid is long; the key factor is the economic situation in three years. An advantage of starting construction now is that the cost will be much lower than in the previous two years
The construction period is not necessarily that long either; our construction took just over 440 days, not including the preliminary design phase, of course.
It’s a low point now; where there are lows, there are also **. Sow during the low points and reap during the high points – in the long run, it’s a good investment
The construction period should now be shorter than before; both the supply time for materials and the production time for equipment are reduced
The market is poor, but construction costs may be lower
On February 12, in Ordos City, Inner Mongolia Autonomous Region, Kailuan Group signed framework agreement on coal chemical project investment with Ordos City ** and Jungar Banner **. The framework agreement covers a project for producing 400,000 tons of formaldehyde per year, a project for producing 40,000 tons of polyformaldehyde per year, and a project for producing 400,000 tons of acetic acid per year. The total investment amount is 3.17 billion yuan, and it is estimated that after all these projects are completed and put into operation, they will generate an annual after-tax profit of 685 million yuan. This coal chemical project is a supporting project for the Hongsuliang mine of Inner Mongolia Kailuan Hongfeng Coal Co., Ltd. The initial investment is around 2 billion yuan; it is not yet clear what projects are included, but I believe it can be understood as a preliminary agreement for joint development of coal chemical industries, representing a medium-to-long-term plan. China’s acetic acid production has reached 2.6 million tons per year, with the main consumption market being the East China region, accounting for around 53% of total consumption. The shipping cost of transporting acetic acid from Inner Mongolia to East China is likely to be 1.5 times that of transporting methanol; as a result, it is less competitive compared to the acetic acid produced locally by companies such as Sinopec, Nanjing-BP, Supor Group, and Wujing Chemical. Around 2011, the production capacity of these acetic acid plants is likely to reach 2 million tons per year, which is sufficient to meet domestic demand for acetic acid.
Competition does not depend on distance; price and product quality are the keys to success in market competition.
Shanghai Dongfang Group is also building a 200,000-ton acetic acid plant in Chongqing Wanli. Is the construction of that plant still in progress?