一、The actuality of domestic corporation
（一）The actuality of corporation
Liaoning Huajin Chemical Industry Group Co., LTD, (for shot’Huajin Group’)gives priority to in fertilizer and synthesis resin, it is a big business which deal in other area. Co., LTD headquarters is located in Panjin in Liaoning province possesses three production base which situate in Panjin,Huludao in Liaoning province and Kuche in Xinjiang province. Huajin is holding Liaonign Huajin Tonghua Chemical Industry Co., LTD,(for short’Liaotong Chemical Industry’, code 000059) underling Panjin Ethylene Co., LTD, Panjin Shuangxing Engineering Plastics Company, Panjin Liaohe Futeng thermoelectricity Co., LTD,Panjin South Chemical Industrial Liaohe Catalyst Co., LTD, Huajin Plastics Co., LTD and other ten companies. Huajin is one of 500 preference corporations and one of 100 preference corporations in China. Now, the total of workers in Huajin is 11098,and Huajin Group has technic personnel 2492, thereinto,the intermediate title of technical post is 778, the high grade is 186.
Huajin Group is main in urea and ethylene production. The output of urea is 1500000 tons, is the biggest fertilizer production enterprise in China, the output of alkene per year is 280000 tons that occupy the important status.Liaoning Huajin Chemical Industry Group has 30 sets of primary apparatus for producing including the synthetic ammonia and urea equipments of Liaohe Fertilizer imported from US Kellogg Company and Netherlands Tamycarna Company respectively, the synthetic ammonia and urea equipments from the deep cooling purification process of US Brown company and ammonia vapor extraction process of Italy Snam Company, the ethylene equipment based on the patent technology of US Roms Company, polyethylene equipment based on vapor-phase fluidized bed process of BP company, polypropylene equipment based on oilization technology of Japan-based Mitsui company, styrene and polystyrene equipment based on the technology of Canada Lanvline Company and ABS polymerization equipment based on oilization proprietary technology of Korea Xinhu Company in Jinxi Fertilizer. All the equipments and technologies have reached advanced world standard, while the major producing enterprises are on high level of management and have obtained ISO9001 quality certificate and ISO 14001 environmental management certificate.
Huajin Group insists on the standard in market with the asset more-sided, the reduction name branded, the technology high-newed, the management internationalization, advances the advancement of technology actively, regulates production configuration. The enterprise has entered a new developing period in virtue of the wind of Northeast area development. In 2005, Huajin Group has chief asset 9.746 billion yuan, implements distribution income 5.715 billion yuan. The bank credit grade is AA.
Legal Representative of Huajin Group: Enliang Feng
（二）Analysis of historical data
Unit : hundred million yuan
| 2001年 | 2002年 | 2003年 | 2004年 | 2005年 | |
| the income of sale | 31.96 | 34.34 | 41.94 | 51.85 | 57.15 |
| taxation(ten thousand yuan) | 20774 | 18530 | 21333 | 38418 | 41141 |
| assets | 87.91 | 88.62 | 92.17 | 96.70 | 97.49 |
| fixed assets | 64.80 | 67.09 | 68.13 | 70.05 | 74.30 |
（三）The introduce of staple
| Staple | Scale | The occupy of home market | The level of technology |
| Synthetic ammonia | 900,000 ton/year | internal advance | |
| Urea | 1500000 ton/year | 3.6% | internal advance |
| Ethylene | 180000 tons/year | International advance in the? incipience of the 90th era | |
| Polythere | 130000 tons/year | 2.5% | International advance in the? incipience of the 90th era |
| Polypropylene | 50000 tons/year | 0.8% | International advance in the? incipience of the 90th era |
| Styrene | 75000 tons/year | 8% | internal advance |
| Polystyrene | 30000 tons/year | internal advance | |
| ABS | 50000 tons/year | 2.8% | internal advance |
| Carbinol | 60000 tons/year | internal advance | |
| Creostote | 10000 tons/year | internal advance | |
| Ctyrene | 84000000 tons/year | internal advance | |
| Butadiene | 25000 tons/year | internal advance | |
| Catalyst | 3200 tons/year | internal advance |
二、 Proposed Cooperation Project
（一）Brief Introduction to Proposed Cooperation Project
1. Project: 0.63 million tons/year ethylene reconstruction and expansion works of Huajin Chemical Group
2. Proposed total newly-increased investment: USD 783.13 million (USD 1=RMB 8.3 yuan)
3. Conditions provided by Chinese Party and investment proportion: utilizing existing ethylene devices with annual output of 0.18 million tons/year, public facilities and cash; the investment proportion will be fixed later.
4. Conditions provided by foreign Party and investment proportion: the foreign party can provide naphtha used for producing ethylene and provide fund in cash, the investment proportion will be fixed later.
5. Technical equipments proposed to be introduced: some patented equipments and equipment for special purpose, for instance, cold pump in deep refrigeration separation, extrusion pelleting system as well as instruments and valves for special purposes.
（二）Choice the site of factory and the gist
1、The site of factory and the area: Planning construct in the north new terra of Huajing Group ethylene factory, the area is 29 hektare.
2、Transportation condition: It has railway 1400000 tons, contacts city with Jingshen and Shenda speedway, satisfies the request absolutely .
3、Ability of drainage: It has verdure water in 22000 tons/day and constructs new slop manage equipment which can deal with 50000 tons/year.(include 20000 tons middle water that can be used )
4、Ability of heat supply: Supplies with Ethylene factory’s assist boiler in existence and The Group’s thermoelectricity.
5、Communication situation: the programme control machine in existence Satisfies the request absolutely .
6、Ability of warehousing: enlarge and transform the establishment in existence.
7、Ability of gas supply: Supplies with Ethylene factory assist boiler in existence and The Group’s thermoelectricity.
8、Ability of investigation and the situation of workers: has national technical center, scientific research 150.
9、Entironment of the place that project in: Contiguous to Bohai Bay, situates Panjing in the south of Liaoning, is Marine sediments plain, with average elevation of earth surface 4 meters.
（三）Production Outline
.Proposed main products and scale ： 20万吨/年、10万吨/年、6.5万吨/年、4万吨/年、3.5万吨/年等。 Based on the combination devices with annual output of 0.18 million tons of ethylene, it is planning to set up equipments with annual output of 0.45 million tons of ethylene so as to additionally produce HDPE, PP, SM, butadiene, toluene, xylol and byproducts with annual output of 0.3 million tons, 0.2 million tons, 0.1 million tons, 65,000 tons, 40,000 tons and 35,000 tons, etc separately.
2.Construction scale and period： The annual output of 0.18 million tons of ethylene will be expanded to 0.63 million tons (i.e. newly setting up production equipment with annual output of 0.45 million tons of ethylene); the annual output of 60,000 tons of polypropylene will be expanded to 0.26 million tons (i.e. newly setting up production equipment with annual output of 0.2 million tons of polypropylene); the annual output of 0.13 million tons of polyethylene will be expanded to 0.43 million tons (i.e. newly setting up high-density production equipment with annual output of 0.3 million tons of polyethylene); the annual output of 75,000 tons of cinnamene will be expanded to 0.175 million tons; the annual output of gasoline hydrogenation equipment will be expanded to 0.45 million tons from original 80,000 tons; the annual output of aromatics extraction equipment will be expanded to 0.25 million tons from original 80,000 tons; the annual output of butadiene extraction equipment will be expanded to 85,000 tons from original 25,000 tons; Construction period is 3 years.
3.Supply of project resources, raw materials and supplemental materials: The project requires newly increasing 1.32 million tons of ethylene each year, which may be purchased domestically or abroad, and other supplemental materials will be bought at home or abroad.
4. Production process: adopting sequential separation flow, firstly separating naphtha into ethylene, propylene, mixed C4 and pyrolysis gasoline, etc through intensive pyrolysis, then producing PE, PP from ethylene and propylene through polymerization reaction and extracting butadiene, after that, extracting aromatics via hydrogenation of pyrolysis gasoline. Other byproducts are used as recycling pyrolysis materials and fuels.
5. Environmental protection solution: the newly-built sewage disposal devices with annual treating capacity of 50,000 tons and the exiting environmental protection devices can meet the requirement of the project.
6. Technology and standard: the pyrolyzer furnace of ethylene devices adopts the technology co-developed by SEI and Lummus or the one co-developed by Shanghai Yigongyuan Co., Ltd. and KTI; the follow-up process adopts SEI’s S&W or KBR depropanation and hydrogenation in advance; the polyethylene device introduces slurry process, polypropylene device adopts domestic SEI technique, cinnamene device adopts the technique of Shanghai Petrochemical Institute; the butadiene and aromatics extraction devices adopts domestic technique.
（四）Market Forecast
The technical standard, market condition and development trend of the industry: Through introducing technique and carrying out construction in 1980s and 1990s, the ethylene industry of our country develops rapidly. In 2004, the total production capacity of ethylene reached 6.005 million tons with output of 6.2664 million tons and the average burden of ethylene device was 104.35%. The domestic consumption of ethylene in 2004 (domestic output＋net import amount of ethylene+ net import amount of ethylene downstream products) was 17.3 million tons and the support rate of domestic ethylene is 36%, thus the supply cannot meet the demand seriously. In estimate, the output of domestic ethylene will reach 8.3 million tons and 15 million tons in 2005 and 2010 respectively. As the downstream products of ethylene, the polyolefin resin is in large demand, the short supply rate of which is about 40%, and most of the high-performance resin for special purpose depends on import. According to the prediction, the domestic demand of polyolefin resin will increase about 10.3% each year in future 5 years. By the year of 2005 and 2010, the import amount of PE, PP and SM will be 3.2 million tons, 3 million tons, 2.31 million tons and 5 million tons, 3.5 million tons, 1.95 million tons respectively, so the development space in the future is huge.
2. The superiority of products in domestic market: Huajin Group’s reconstruction and expansion project with annual output of 0.63 million tons of ethylene will adopt domestic technique and equipments to the greatest extent so as to reduce investment, in addition, accelerating construction by relying on the original factory, shortening construction period, lowering cost and improving market competitive power.
3. The forecast for market share and developing of products after the project put into production: The newly added products of Huajin ethylene extending project mainly like PE, PP and SM, the market share of PE and PP is 2.5%, 0.8% of Huajin Group in 2004, and the most products sold in the market of northeast and north China, a few sold in the east China and SM products for self-use. After the project put into production, on the one hand, PE and PP products continue cement and extend northeast and north China market; on the other hand, improve the market share of north China. SM part used to produce ABS for this enterprise, the rest part sold in the market of northeast and north China. Estimating in the future 20 years, as the plastic pitch market moved towards north and the domestic polyalkene market mainly in northeast and north China, which provide the advantage completing market for extending Huajin ethylene.
（五）Benefit Evaluation
1. Investment composing: The project newly added total investment RMB 6.5 billion yuan, in which construction investment (include the interest of building period) RMB 6 billion yuan, flow capital RMB 0.5 billion yuan.
2. Economy Benefit: After the project put into production, estimated that newly added sales income RMB 7 billion yuan, total cost RMB 5.5 billion yuan, after-tax profit RMB 0.8 billion yuan, tax amount RMB 0.7 billion yuan. Simple (static state) payback period is 8.40 years (include 3 years’ construction period). Suggestion of profit distribution: invest again and find the new benefit point of growth. .
3. Analysis of profit and loss balance: Sales income is the most sensitive factor; the profit and loss will balance while the price fell 80%.
三、Conclusion
The project is national debt one of invigorating Old Northeast Industrial Base, conforms to industrial policy of the nation, optimizes industrial structure, and brings very good social benefit and economic benefit.
四、The way of contact
Contact unit: The development programming office of Liaonig Huajin Chemical Industry Group in China.
Linkman: Feng Li
Tel: 86-427-5855241、5859127
FAX: 86-427-5859043
E-mail: huajinlifeng@sohu.com
Homepage：http://www.huajinchem.com
