The future survival prospects of small and medium-sized ammonia plants
Thread Content
This post was last edited by TH373637 on 2011-6-25 22:34. The topic is a bit broad, but it’s an inevitable thing. At present, small and medium-sized ammonia plants still make up the majority. Even in the medium size category, this is achieved by increasing the number of units. Overall, it also tends toward overcapacity, as well as high energy consumption and heavy emissions. The reason for this situation is the inadequate policies and excessive local protection. It is well known that the production of synthetic ammonia is an industrial process that has existed for a long time; nowadays it is carried out on a large scale, with three to five different products being produced in a complementary manner, all in order to achieve zero emissions and low energy consumption. It’s also incredible that small, high-energy-consuming devices that are larger than large-scale systems can still be profitable. This also only occurs in periods when the market economy is not yet fully developed. Currently, there is also a strong trend of following this approach; people say that in order to reduce transportation costs associated with coal chemicals, factories are being built near coal mines. Nor is the local area or water resources there taken into consideration. (It’s a bit extreme to say that; it’s impossible not to take considerations into account – after all, the decisions are made based on practical factors.) This might also lead to higher costs in the future. Taken all this into account, it doesn’t necessarily mean that small ammonia plants have no way forward. It is necessary to find engineers with sharp eyes and a strong sense of responsibility now, in order to thoroughly assess whether it is really necessary to build large ammonia plants with a capacity of over 30 units. If it isn’t necessary, it’s better to shift to alternative approaches sooner. This is not meant as a threat; there are already precedents for this. The era when policies alone were sufficient may be over, and the process of transformation is likely coming to an end. Unlike other manufacturing plants, ammonia synthesis plants feature a high degree of continuity and coordination, which makes energy consumption particularly significant. In other words, there isn’t much potential to be tapped into. Potential for improvement has been explored for roughly a decade now (of course, this doesn’t mean it’s all been addressed; there is still potential that cannot be seen at present, but it refers to most of it). Currently, efforts to tap into this potential focus on two main aspects: one is to keep up, and the other is to invest money in expansion. This also refers to the situation of coordinating planning and the market after the shift from a planned economy to a market economy; where development brings about competition, and competition leads to elimination. For example, in Tianjin, it is difficult to get approval for large-scale designs or minor renovations, while in Shandong, small-scale designs that feature six-stage compression and low-level purification cycles can be developed successfully – this is due to a lack of regulation and reckless development. Because this license is extremely valuable. Of course, it’s not the units represented here that will be eliminated, because these are all highly competent employees.
Indeed, the future for small-scale nitrogen fertilizers certainly looks bleak. There’s nothing that can be done about it – they lack cost advantages, lack scale, and environmental control issues also exist. Of course, as long as costs remain low, they can still survive, but their opportunities will become increasingly limited and their advantages will keep shrinking
The small ammonia synthesis plant where I used to work has long since been privatized and has been shut down for over 2 years. It seems it can’t be kept running anymore; a large number of employees have left, and the owner has no interest in continuing to manage it. Closure is only a matter of time.
Those who fall behind will inevitably be eliminated; it’s an inevitable consequence of technological progress – the prospects are bleak!
Temporary survival is not a problem; after all, China is vast and has a high demand for fertilizers. Moreover, as it is still a developing country, small and medium-sized ammonia plants still have room to survive； However, as the economy continues to develop, economies of scale represent the trend in growth. Energy conservation, emission reduction, as well as safety and environmental protection are essential for the survival of chemical enterprises. Compared to large ammonia plants, small and medium-sized ammonia plants are constrained by factors such as scale, capital, resources, and technology, making it difficult for them to compete with larger ones. Therefore, these smaller plants have no other choice but to grow larger if they are to survive.
As long as small nitrogen fertilizer companies manage effectively, introduce more advanced equipment and processing technologies, and reduce costs, they can still survive and thrive. After all, it is impossible for China to establish large-scale enterprises quickly, nor can it introduce foreign technologies in their entirety.
My former employer was Zhongniang; it has been shut down for over two years now. The employees are currently working at coal chemical enterprises in places such as Inner Mongolia, Xinjiang, and Shandong. Their salaries have increased significantly, but they live far away from home. It seems highly unlikely to drive now; the prospects aren’t optimistic at all!
The situation for large-scale fertilizer production is not easy either. In the past, such fertilizers were mainly produced using natural gas, which is seeing increasing prices and is also in short supply. Medium-nitrogen fertilizers are essentially no different from low-nitrogen fertilizers; the only difference is that they are produced on a larger scale. Due to slow development, their current production capacity is even lower than that of some of the earlier low-nitrogen fertilizers. The future landscape should consist of large fertilizer production projects in coal-producing areas, as well as smaller nitrogen fertilizer projects in the interior regions that feature more sophisticated management and diversified operations.
The reform of gasification technology is one of the solutions for small-scale nitrogen fertilizers; the use of coal for direct combustion is bound to come to an end sooner or later
Reply to 6# Yan Qiusheng: I do have some thoughts. Comparing small ammonia plants with large ones can be a bit arbitrary; it’s not necessarily the case that smaller plants have no future. Under the current circumstances, however, much more effort is required compared to large ammonia plants, or new discoveries in terms of resources could bring about significant changes. Just because something is large doesn’t mean it’s free from problems; there may be blindness in design, a lack of diversity in resources, and inefficient management. However, as competition intensifies, the rules tend to become more detailed, and enforcement tends to be stricter; moreover, innovation as a means of progress is an inevitable trend. But one thing is certain, and that is cost. Only by keeping up with this can there be a way forward. Of course, an optimistic attitude is necessary; if the mountains don’t move, the water will.
The future for small-scale nitrogen fertilizers is certainly not bright. There’s nothing that can be done about it: they lack cost advantages, lack scale, and environmental control poses another problem. With high costs, their market opportunities will continue to shrink, and their advantages will become increasingly minimal