Huachang Chemical:
Leading Chemical Fertilizer Enterprise in Yangtze River Delta Area   

Jiangsu Huachang Chemical Co., Ltd. (Huachang Chemical, SZ: 002274), located in Zhangjiagang of Jiangsu province, engages in the basic chemical business to serve agricultural, glass and fine chemical sectors. Major products include soda ash, ammonium chloride, ammonia (liquid and anhydrous ammonia), compound fertilizers, urea and methanol. The company has a capacity of 300 000 t/a ammonia, 300 000 t/a urea, 300 000 t/a soda ash, 330 000 t/a ammonium chloride, 800 000 t/a compound fertilizers and 50 000 t/a methanol today. It is not a giant in China by the capacity of chemical fertilizers and soda ash, however the company holds a leading position in chemical fertilizers and soda ash in the Yangtze River Delta area.
    The sustained growth of demand for grain has promoted a constant price rise of chemical fertilizers in the world. Owing to the brisk demand in downstream glass and alumina sectors, the demand for soda ash will also maintain an increase in China. Benefited from the sustained prosperity of these two sectors, Huachang Chemical's performance is expected to have a rapid growth. The main-business revenue of the company was RMB1.145 billion in 2005, RMB1.498 billion in 2006 and RMB2.272 billion in 2007, an annual increase of 48.40%, 34.38% and 51.68% respectively.
    The company accomplished a main-business revenue of RMB1.48 billion and a net profit of RMB200 million in the first half of 2008. The net profit from January to September 2008 is estimated to be 160-180% higher than the same period of 2007. The net profit gained by the company was RMB83.04 million from January to September 2007. The performance growth was mainly driven by the price rise and the sales increase of major products.

Listed in stock market   

In September 2008 Huachang Chemical made an IPO of 51 million shares and raised around RMB512 million from the stock market. Its biggest shareholder Jiangsu Huana Investment Co., Ltd. holds 41.25% equity and its second biggest shareholder Jiangsu Huachang (Group) Co., Ltd. holds 19.41% equity. RMB342 million of the funds raised will be used in the power innovation project and RMB170 million will be used in the 1 000 t/a solid sodium borohydride renovation project. The power innovation project will increase the secondary utilization rate of gas-making cinder and coal dust to maximize energy utilization. After the project reaches the design capacity, 91 900 tons of standard coal will be reduced in the process a year and the cost will be down by RMB60 million. The solid sodium borohydride project is a renovation to the production technology for hydrogenated products. It can fully employ the advantage of hydrogen resources and bring the company to the fine chemical sector.

Advantages of operation   

Huachang Chemical is located in Zhangjiagang and its products are well sold in the Yangtze River Delta area. According to the company, the annual demand in Jiangsu, Zhejiang provinces and Shanghai is around 600 000 tons for ammonia, 5.0 million tons for urea and 4.0 million tons for soda ash. These products produced in Jiangsu province and surrounding areas can not meet the demand. The company site close to markets and has convenient railway, highway and waterway around. In case of similar production cost compared to other fertilizer producers, the relatively low freight has strengthened the market competitiveness of its products. The company has varietal products include compound fertilizer, urea, co-production soda ash and ammonium chloride. The diversified development has enhanced the risk-withstanding ability of the company to a certain extent.
   Huachang Chemical has announced that it will conduct energy conservation renovation to existing units of basic chemicals such as ammonia, urea and soda ash based on circular economy technology to achieve the efficient utilization of resources. The company will use existing units to extend the production chain of the chemical business. It will fully use the great quantities of hydrogen sources in the ammonia production to extract high-purity hydrogen, develop hydrogenated products and make expedition to the fine chemical sector. The company has also developed the activated sludge biochemical-process water treatment system, the ammonia water circulation system, the soda ash co-production water circulation system and the gas-making sludge close-loop circulation system.

Development programs   

The company acquired 150 hectares land in Yangzijiang International Chemical Industry Park in Zhangjiagang, Jiangsu province in 2003 to construct a capacity of 600 000 t/a ammonia, 600 000 t/a soda ash, 660 000 t/a ammonium chloride, 600 000 t/a urea, 1.0 million t/a concentrated compound fertilizers and 100 000 t/a refined methanol in three phases. The first-phase project with a capacity of 400 000 t/a ammonia, 400 000 t/a urea and 800 000 t/a compound fertilizers has already been completed and come on stream while the second-phase project with a capacity of 200 000 t/a soda ash is under preparation.