Kailuan Co., Ltd.: Revenue from the coal chemical industry accounts for over 70% of the company’s total revenue

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Developing the coal chemical industry based on coal is an effective way for major coal companies to grow and strengthen themselves at present, and among these coal enterprises, Kailuan Co., Ltd. (600997) is one of them. Data shows that in 2009, Kailuan Co., Ltd. achieved operating revenues of 10.977 billion yuan and a net profit of 823 million yuan, representing increases of 16.76% and 1.42% respectively on a year-on-year basis. By industry, the operating revenue of coal mining and processing is less than 30%, while that of coal chemical industry exceeds 70%. Kailuan Co., Ltd.’s annual report states that the increase in the company’s revenue was mainly due to the completion and commissioning this year of various projects, such as the 300,000 tons per year coal tar processing project, the second phase of the 2 million tons per year coking project at Jingang Port, the second phase of the 200,000 tons per year methanol production project using coke oven gas, the energy-saving renovation project for the first phase of the 2 million tons per year coking project, and the 100,000 tons per year crude benzene hydrogenation and refining project – all of which led to an increase in sales of other coal chemical products. At present, Kailuan Co., Ltd. owns the two coal mines of Fangezhuang and Lujiatuo, which are known as \"the first mines in New China\". It also holds a controlling stake in five other companies, including Qianan Sinochem Coal Chemical Co., Ltd., Tangshan Zhongrun Coal Chemical Co., Ltd., Tangshan Kaibos Kailuan Carbon Chemical Co., Ltd., Shanxi Zhongtong Investment Co., Ltd., and Canadian Kailuan Dehua Mining Co., Ltd. Among the five companies controlled by Kailuan Co., Ltd., three are in the coal chemical industry, which is sufficient to demonstrate the company’s ambition to develop this sector. Last year, Kailuan Co., Ltd. actively responded to the impacts of the financial crisis, focusing on expanding its coal resources and deepening the coal chemical industry chain. It worked to increase coal production capacity and scale, while also strengthening the construction and operation of coal chemical projects, thereby ensuring stable development in the company’s operations. In 2009, the company produced 7.7122 million tons of raw coal, a year-on-year increase of 2.83% ； 2.9196 million tons of refined coal were produced, a year-on-year increase of 17.15%; 2.3557 million tons of such coal were sold abroad, representing a year-on-year increase of 27.58%. In terms of the coal chemical business, the company produced 3.9514 million tons of coke and sold 3.9367 million tons of coke, representing year-on-year increases of 29.52% and 29.80% respectively ； 173,700 tons of methanol were produced, and 172,600 tons were sold, representing year-on-year increases of 185.69% and 178.39% respectively ； 40,200 tons of pure benzene were produced. A year-on-year growth rate of nearly 200% in the production and sales volume of methanol indicates strong market prospects for this product, which could become an important source of profit for the company in the future. The Fanggezhuang Mine and Lujiatuo Mine have a coal production capacity of 8 million tons, producing nearly 3 million tons of high-quality coking coal each year, thereby providing raw material support for the company’s downstream coal chemical operations. At present, the company’s coal chemical industry has reached a certain scale. In the future, it will continue to build a 150,000-ton/year adipic acid production facility as well as a 60,000-ton/year polyoxymethylene production plant using methanol as raw material, thereby extending the coal chemical industry chain and achieving effective expansion of this industry. While developing coal chemical industries, Kailuan Co., Ltd. attaches great importance to energy conservation and emission reduction. An effective approach has been established for the wastewater generated in the coal chemical park, ensuring zero emissions, thorough treatment, and full recycling: the ammonia-containing industrial wastewater is first treated biologically and then subjected to further advanced treatment, to be used as supplementary water for the production’s circulating cooling water system ； The treated wastewater from industrial processes is processed through intermediate water treatment and used as make-up water for the production cycle cooling water system, thereby achieving comprehensive utilization of water resources and yielding shared benefits in terms of social and environmental advantages as well as corporate economic gains. Kailuan Co., Ltd.’s first-quarter report shows that in the first three months of this year, the company achieved operating revenue of 3.303 billion yuan, a year-on-year increase of 66.85%, and recorded a net profit of 210 million yuan. http://www.ccoalnews.com/101773/102749/132243.html