[Haichuan Project Updates] Public announcement on the technical upgrade project for the syngas unit of Yangmei Zibo ammonia synthesis project

I. Basic Information of the Enterprise 1. Chinese name and abbreviation: Yangmei Group Zibo Qilu First Chemical Fertilizer Co., Ltd. (abbreviation: Qilyu Yihua) 2. Foreign name and abbreviation: Yangmei Group Zibo Qilu First Chemical Fertilizer Co., Ltd. (abbreviation: QLYH) 3. Legal representative: Zhang Hao 4. Shareholder name: Yangquan Coal Industry and Chemical Group Co., Ltd. 5. Registered address: No. 2, Yihua South Road, Linzi District, Zibo City, Shandong Province 6. Office address: No. 7, Yihua North Road, Linzi District, Zibo City, Shandong Province (Postal code: 255436) 7. Website: http://www.qlyh.cc 8. Email address: ymjtqlyh@163.com 9. Overview: Qilyu Yihua is a chemical enterprise with a history of over 40 years. Its predecessor was the First Chemical Fertilizer Plant of the Qilu Branch of Sinopec Corporation; the plant was established in July 1969 and began operations in December 1972. It was China’s first medium-sized domestic nitrogen fertilizer plant to produce synthetic ammonia and urea using waste gases from oil refineries as raw materials. After a technical transformation from gas to coal in 2004, the facility was restructured by the end of December and entered the market to operate independently. In March 2008, it underwent a strategic restructuring with Yangquan Coal Industry (Group) Co., Ltd., becoming part of Yangquan Coal Group; it is now a wholly-owned subsidiary of Yangquan Coal Industry Chemical Group Co., Ltd. As of the end of March 2020, Qilu Yihua had 828 employees. It owned one holding subsidiary, Shandong Jianlan Chemical Co., Ltd., and one wholly-owned subsidiary, Shandong Runlan Chemical Co., Ltd. The company’s total assets amount to 1.175 billion yuan, while its total liabilities amount to 143 million yuan; thus, the debt-to-asset ratio is 12.17%. The current capacity of the facility is 210,000 tons per year of octanol and 30,000 tons per year of isobutyraldehyde, with the ability to switch to produce 80,000 tons per year of butanol as well. The company’s main products include octanol, n-butanol, isobutanol, n-butyraldehyde, isobutyraldehyde, etc., and it holds the registered trademarks “Qiyang” and “Jianlan”. Through continuous development, the company has seen increasingly optimized production processes, a gradual reduction in various types of consumption, and an ongoing improvement in management standards. It has also achieved significant results in both the development of its material infrastructure and its spiritual culture. Guided by the ambitious goal of building a \"safe, harmonious, and prosperous chemical industry,\" the company adheres to the principles of \"integrity, dedication, innovation, and development.\" All employees work together in unity to create a harmonious working environment. Today, Qilu Yihua, while maintaining the production of butyl and octyl alcohol, is looking to the long term; based on new gasification technologies, it is carrying out technical upgrades to its existing facilities in order to achieve transformation and development, thus striving to ensure the sustainable, stable, and healthy growth of the company. At present, this technical upgrade project (the technical upgrade project for the 45,000 Nm3/h syngas plant) has been approved by the local authorities. Demolition work is underway on the parts of the plant that are used for fertilizer production. Construction of the first phase is expected to begin in June, while the second phase will be carried out in 2021