1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

In order to meet the demand for high-purity special acrylic polyol esters in electronic new materials such as polyimide, photoresist, optical adhesive, 3D printing, UV coating adhesive, etc., reduce the current import dependence of high-purity special acrylic polyol ester monomers in the high-end field in China, and accelerate the process of domestic substitution, the project relies on the abundant raw material resources of Tonghua City and Jilin Province, with an annual output of 50,000 tons of special acrylic polyol esters, aiming to break through the bottleneck of industrialization of high-purity special acrylic polyol esters and accelerate the process of domestic substitution.

1.1.2 Market prospect

(1) Current situation of acrylic acid industry

Acrylic acid is one of the most important basic raw materials and intermediates in modern chemical industry. Due to its strong polarity, unsaturated double bonds, and carboxylic acid structure, acrylic acid has excellent polymerization and esterification functions, which can be derived into many types of acrylic ester compounds. Acrylic acid is mainly used in the production of acrylic esters, as well as high water absorbent resins (SAP), special acrylic esters, water treatment agents, detergents, etc. At present, the products available on the market include regular acrylic acid with a content of 99.0% and refined acrylic acid with a content of over 99.5%, with the main difference being their purity. Acrylic acid of different purities can be applied to the production of different downstream products.

The upstream of China’s acrylic acid industry is raw materials used for the production of propylene. It is divided into propylene extracted from traditional energy sources such as petroleum and propylene extracted from biobased sources such as ADM corn. The middle reaches are acrylic acid and ester, of which the downstream of acrylate is corresponding to polymer lotion, resin, etc., and the terminal applications are coatings, textiles and other industries; The downstream counterpart of high-purity acrylic acid is SAP, and the terminal field is hygiene products.

Acrylic acid is chemically active and easily polymerizes in air. It can be reduced to propionic acid upon hydrogenation and reacts with hydrogen chloride to produce 2-chloropropionic acid. It is mainly used for the preparation of acrylic esters. According to data, acrylic acid accounted for over 50% of the downstream market in China in 2022. Next is highly absorbent resin, accounting for 24%.

The industrial production of acrylic acid in China started in the 1950s, but for more than 20 years, its production scale has always been small and the industry development has been relatively slow; It was not until the late 1970s that large-scale industrial production of acrylic acid was achieved in China. Enterprises such as Beijing Dongfang Chemical Plant, Jilin Chemical Industry Company, and Shanghai Gaoqiao Petrochemical Acrylic Acid Plant successively built 10,000 tons of acrylic acid and ester production facilities, which effectively promoted the development of the acrylic acid industry.

Since 2005, with the development and growth of downstream industries such as coatings and textiles, China’s acrylic acid industry has rapidly developed and its production capacity has experienced rapid growth; By 2008, its production capacity had increased to 1.06 million tons, and by 2015, it had grown to 3.402 million tons; But by 2016, there had been no new production capacity for acrylic acid in China, and coupled with the closure or withdrawal of some production facilities from the market, its production capacity had declined to 2.95 million tons, with a year-on-year decrease of 13.23%; Afterwards, the production capacity of acrylic acid began to rebound and maintained a steady growth trend, and reached 4.08 million tons in 2023, with a year-on-year increase of 4.62%. Furthermore, China’s acrylic acid production was 2.457 million tons in 2022, with a year-on-year increase of 7.5%; In 2023, China’s acrylic acid production was 2.54 million tons, with a year-on-year increase of 3.4%.

(2) Current situation of acrylic ester industry

Acrylic ester is an organic chemical raw material, usually prepared by esterification of acrylic acid with corresponding alcohols. Acrylic ester is an important polymer monomer, which is mainly polymerized or copolymerized with other monomers to prepare polymers. The copolymers have excellent optical properties, heat resistance, weather resistance, chemical stability, and significant mechanical properties. They are widely used in many industries such as coatings, textiles, chemical fibers, adhesives, leather, washing, papermaking, plastics, rubber, medical, oilfield chemistry, etc., penetrating into the daily life of the national economy and various fields such as high-tech and new materials with broad market space.

At present, the concentration of the acrylic resin market in China is not high, and market competition is intensifying with the further expansion of the industry’s total production capacity. In recent years, some industry enterprises with unreasonable regional layout and lack of product competitiveness have gradually been eliminated by the market, and the overall concentration of the industry has been further improved. The main domestic production enterprises include Suzhou Xingye, Zhongshan Huamingtai, Wuhan Strongchem, Guangdong Tloong, Shanghai Baolijia, Zhuhai Changxian New Materials, etc.

From the perspective of import and export quantity, the import volume of China’s acrylic resin industry is much greater than the export volume. According to data from the General Administration of Customs of China, China imported a total of 1.1218 million tons of acrylic resin in 2021, with a year-on-year increase of 10.86%; Exports amounted to 523,700 tons, with a year-on-year decrease of 6.37%. In terms of import amount, China’s acrylic resin is mainly imported from South Korea, Japan, Taiwan, China, Malaysia, etc. The quantity of imports from South Korea accounted for 28.87% in 2021, and the quantity of imports from Japan accounted for 16.38%.

The proportion of acrylic ester used in the production of coating products was 36%, and the proportion used in adhesive products was 31%. Both are the main downstream products of acrylic ester, accounting for more than 65% in total.

In recent years, the demand for acrylic acid polyols in China has maintained rapid growth, and the number of enterprises in the industry has also continued to increase. However, due to the late start of industrial production of acrylic acid polyols in China and the low downstream awareness of acrylic acid polyols,and limited by technology, and scale of demand, etc., the overall production capacity of acrylic acid polyols in China is weak, and the number of related enterprises is not large. The main enterprises include Guangdong Shengfu New Materials Co., Ltd., Covestro Polymer (China) Co., Ltd., Nantong Baisen Chemical Co., Ltd., Zhejiang Deshang Chemical Technology Co., Ltd. The market concentration is high, and the high-end product market is mainly occupied by foreign brands such as Mitsui from Japan, Dow Chemical from the United States, and DSM from the Netherlands.

The project relies on the industrial advantages of Tonghua Chemical Industry Park to produce special acrylic polyol esters, with broad market prospects.

1.1.3 Technical analysis

This project adopts the green process and patented technology of Tianjin University’s continuous catalytic reaction distillation direct esterification method to produce acrylic polyol esters. The technology uses solid acid as a catalyst to catalyze the esterification reaction, and uses the characteristics of the reaction distillation tower to timely remove the light components from the reaction system, promoting the conversion rate of raw materials and avoiding the problems caused by benzene or toluene as water carrying agents.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

China has always attached great importance to the development of industry. In the “14^th Five-Year Plan” for industrial development, it was proposed that China’s industry should achieve the initial formation of an innovation driven development model and solve a number of bottleneck problems as soon as possible. With the support of national policies, the adjustment and transformation of old industrial bases such as Northeast China are accelerating.

The 14^th Five-Year Plan for Industrial Development in Jilin Province proposed nine key development industries: automobile industry, food industry, petrochemical industry, equipment industry, pharmaceutical industry, metallurgical and building materials industry, optoelectronic information industry, light industry and textile industry, and energy industry.

The People’s Government of Tonghua City has released the 14^th Five-year Plan for National Economic and Social Development and Outline of Long-range Objectives for 2035 of Tonghua City, which pointed out that it will vigorously develop fine chemical industry, adhere to the transformation from extensive chemical industry to fine chemical industry, build Tonghua Chemical Industry Park, and transform Tonghua into a chemical pharmaceutical and new chemical material industrial base in Jilin Province.

The Outline of the 14^th Five-Year Plan for National Economic and Social Development and Vision 2035 of Jilin Province proposed that during the 14^th Five-Year Plan period, Jilin Province will promote the transformation of the petrochemical industry towards “reducing oil and increasing chemical production” and fine chemical industry, and promote the transformation of products from “raw material type” to “material type”. By 2025, the industrial scale will reach 150 billion yuan.

In March 2023, the National Development and Reform Commission agreed to establish a demonstration zone for industrial transfer in southwestern Jilin, focusing on enhancing industrial transfer capacity, optimizing business environment, deepening open cooperation, effectively undertaking domestic and foreign industrial transfer, promoting industrial transformation and upgrading in the process of undertaking, and striving to build the demonstration zone into a characteristic manufacturing base in Northeast China, a green and low-carbon transformation pilot zone, a new highland for regional cooperation and development, and an important agricultural and special product processing base in China. The demonstration zone covers three cities: Siping, Liaoyuan, and Tonghua. This project is a petrochemical industry project among the seven major undertaking industries in the demonstration zone.

(2) Resource advantages

The main raw materials required for project production include acrylic acid, methacrylic acid, n-propyl acrylate, propyl methacrylate, ethylene glycol, N, N-dimethylacrylamide, tetrahydrofurfuryl alcohol, dicyclopentadiene, isobutene, phenoxyethanol, hydroxyethyl acrylate, hydroxyethyl methacrylate, 1,4-butanediol, 1,6-hexanediol, isodecanol, esterification catalyst, methylsulfonic acid, p-toluenesulfonic acid, cyclohexane, polymerization inhibitor, etc. Jilin Petrochemical Company within Jilin Province can supply two types of raw materials, such as ethylene glycol and isobutene, required for the project, while other raw materials are purchased locally.

(3) Industrial advantages

The Tonghua Chemical Industry Park relies on the advantages of Changbai Mountain’s resources such as pharmaceuticals and mountain treasures, as well as the advantages of metallurgy, medicine, mechanical processing and manufacturing industries, to develop chemical raw materials and pharmaceutical intermediates upstream, with a focus on the development of pharmaceutical and chemical industries, fine chemicals, and new chemical materials. Tonghua Chemical Industry Park is one of the first five chemical industrial parks in Jilin Province to pass the review and recognition. It has passed the Level C risk assessment of the Provincial Emergency Department. The Park has a recent planned area of 7.07 k㎡ and a long-term planned area of 13.4 k㎡. It has strong land resource supply capacity and has the advantage of undertaking large-scale chemical projects and good projects, with complete infrastructure.

(4) Location advantages

The highway and railway traffics in Tonghua City extend in all directions, forming a highway network connecting the three provinces in Northeast China, and for customs entry and exit, mainly including Ji’an-Xilingol League Abaga Banner Expressway (National Highway 303), Hegang-Dalian Expressway (National Highway 201), Heilongjiang-Dalian Highway (National Highway 202), and Yingchengzi-Fumin Expressway. The first-class highway from Tonghua to Meihekou has been opened to traffic. There are crisscross Shenyang-Jilin, Meihekou-Ji’an, and Yayuan-Dalizi Railways, as well as direct passenger trains to Beijing, Qingdao, Shenyang, Changchun, Dalian, Baihe and other places.

(5) Talent advantages

At present, Tonghua City has 3 national key secondary vocational schools, 3 provincial key secondary vocational schools, and all its county-level vocational education centers have passed the provincial key school acceptance and entered the top 100 schools in the province. It is the first region in the province where all county-level vocational education centers have entered the provincial key school list. In recent years, by making scientific layout, continuous promotion of vocational education structure adjustment and resource integration, exploration of new paths for diversified education, and continuous improvement of modern vocational education network system construction, the local characteristics of vocational education have begun to form, and the ability to serve economic and social development has gradually improved.

Tonghua Municipal Government has signed science and technology strategic cooperation agreements with provincial universities and research institutions such as Northeast Normal University, Jilin Agricultural University, Changchun Institute of Applied Chemistry, Chinese Academy of Sciences, and Tonghua Normal University, etc., providing scientific and technological support for development of the enterprises. Tonghua City continues to provide assistance for enterprises in talent cultivation and other aspects, vigorously implements the “Plan for Revitalizing Enterprises with Ten Thousand Students” and “Plan for Homing of a Thousand Students”, and continuously attracts college graduates for enterprises.

1.2 Contents and scale of project construction

1.2.1 Product scale

The project has an annual production capacity of 50,000 tons of special acrylic polyol ester series products, with Phase I producing 20,000 tons of acrylic polyol ester monomers and Phase II producing 30,000 tons of special acrylic polyol esters. The main products include more than 20 other types, such as hydroxyethyl acrylate (HEA), hydroxyethyl methacrylate (HEMA), ethylene glycol diacrylate (EGDA), ethylene glycol dimethacrylate (EGDMA), and methyl allyl alcohol.

1.2.2 Contents of project construction

The total area of the project is 70 mu, with a total construction area of 35,980 ㎡. Phase I of the project covers an area of 30 mu and has a building area of 15,980 ㎡; Phase II of the project covers an area of 40 mu and has a building area of 20,000 ㎡. The project mainly constructs the main factory building, production workshop, warehouse, laboratory, sewage treatment station, supporting facilities, etc., and purchases production equipment.

1.3 Total investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of the project is 450 million yuan, including the construction investment of 400 million yuan and current funds of 50 million yuan.

1.3.2 Capital raising

Raised by the enterprise itself.

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales revenue will be 500 million yuan, its profit will be 100 million yuan, its investment payback period will be 7.5 years (after the tax, including the construction period of 3 years), and its return on investment will be 22.2%.

Note: “10 thousand yuan” in the table is in RMB

1.4.2 Social evaluation

After the project is completed and put into operation, it will gradually add some labor force, drive the aggregation of related enterprises in the upstream and downstream of the industrial chain, increase the employment demand of related enterprises in the industrial chain, and directly or indirectly increase a large number of job positions, providing employment opportunities for potential employment groups.

1.5 Cooperative way

Investor's sole proprietorship.

1.6 What to be invested by the foreign party

Funds, equipment and technology.

1.7 Construction site of the project

Tonghua Chemical Industry Park.

1.8 Progress of the project

The project cooperation plan has been prepared.

2. Introduction to the Partner

2.1 Basic information

Name: Chemical Industry Park Management Bureau of Lugang Economic Development Zone

Address: North of National Highway 303, Tonghua County, Jilin Province

2.2 Overview

Jilin Tonghua Land Port Economic Development Zone, formerly known as Jilin Tonghua International Land Port Zone, is located in the northern part of Tonghua City, with a regional area of 266.96 square kilometers and a planned control area of 79.65 square kilometers. Since its establishment with the approval of the provincial government in 2016, its regional driving capacity and radiation effect have been continuously enhanced. As an important carrier for Jilin Province to implement southward opening up, the Port Area carries and plays a functional role in highway container center stations, railway container center stations, bonded logistics centers (Type B), comprehensive logistics parks, chemical industry parks, etc. It is striving to build an open cooperation zone that integrates bonded processing, modern logistics, industrial cooperation, and technological innovation.

The port area has obvious location advantages, prominent strategic advantages, and convenient transportation and logistics. Located along the border and near the sea, in the center of Northeast Asia, backed by the hinterland of the Northeast East Green Economic Belt; There are five or two railways and Tonghua Airport in the area, and modern logistics platforms such as highway container center stations, bonded logistics centers, and comprehensive logistics parks have been built. A commercial processing entrepreneurship park and a chemical industrial park have been built in the area, and the Northeast Asia International Agricultural and Forestry Products Trading Center is currently under construction. During the 14^th Five-Year Plan period, the Port Area was guided by the overall strategy of Tonghua City’s “one-four-five”, with the construction of “one port and two parks” as the layout and the creation of a new highland for open cooperation as the main line. It adhered to the integrated development of “port industry city”, solidly promoted key projects such as the commercial processing and entrepreneurship industrial park, Tonghua Pharmaceutical and Chemical Industry Park, Northeast Asia Agricultural and Forestry Products Trading Center, continuously optimized basic supporting capabilities, improved the carrying capacity of the Park, enhanced platform service level, and made every effort to build a commercial logistics and industrial agglomeration center in the eastern part of Northeast China.

2.3 Contact method

2.3.1 Contact method of cooperator

Contact unit: Chemical Industry Park Management Bureau of Lugang Economic Development Zone

Contact person: Sun Yanna

Tel: +86-18504353555

E-mail: gwqhgyqglj@163.com

2.3.2 Contact method of the city (prefecture) where the project is located

Contact unit: Tonghua Municipal Commerce Bureau

Contact person: Wang Liangchen

Tel: +86-435-3199017+86-18643036783

E-mail: thsswjtck@126.com