Innovation Helps Domestic Petroleum & Chemical Industry Keep Growing

Domestic petroleum and chemical industry achieved annual growth of 1.7% in main business revenue for 2016, compared after a decrease in 2015 of 6.1% YoY. Total profits were basically the same as in 2015, reaching RMB644.44 billion, after 2015’s sharp decrease of 18.2% YoY. According to the latest report released by CPCIF on February 16, industry performance for the year was much better than had been expected midyear.
Domestic petroleum and chemical players are trying to transform their development mode from quantity-driven to innovation-driven. So far, China has decommissioned 84 refining plants nationwide, all with individual capacity less 2 million t/a, totaling 57.95 million t/a. Furthermore, the nation has phased out 40 synthetic ammonia plants, with a total capacity of 4.13 million t/a.
As the 2016 trade deficit for the domestic petroleum and chemical industry was US$136.08 billion and high-end chemicals were in short supply here, industry players continued to reform product structure. Take Hangzhou Electrochemical Group Co., Ltd. for instance – the company altered its PVC plant to produce CPVC as PVC prices plummeted.
The strategy of intelligent manufacturing has benefitted certain manufacturers in several sectors – refining, chemicals, fertilizers, chlor-alkali, tires and new chemical materials. Wanli Tire, based in Guangzhou, successfully put a 1 million pcs /a all steel radial tire plant into operation in Hefei, Anhui province, employing 696 people, whereas a traditional tire plant of comparable scale would require 2 100 employees.
CPCIF promotes optimism for 2017 performance, driven by management innovation and technology innovation, even though China’s petroleum and chemical industries face a complicated international economic environment. The total 2017 profits of the industry are expected to grow 7% to 9% year-on-year, while main business revenue is forecast to increase 6% to 8%.        
(By Lily Wang)