Transformation and upgrading: Shaanxi Coal Group ushers in a new era of development
2020-02-07 13:49:50
Since 2012, the macroeconomic situation has been intricate and complex, and the coal market has entered a severe downturn. During these challenging times, over 90% of coal enterprises suffered losses. Shaanxi Coal and Chemical Industry Group (hereinafter referred to as "Shaanxi Coal Group"), as a provincial-level super-large state-owned enterprise, has bucked the trend in the market downturn, demonstrating the demeanor of a strong player. In 2015, it made its way into the Fortune 500 list and has remained on the list for three consecutive years, with its ranking improving year by year.
In the cold winter of the charcoal industry, why is Shaanxi Coal uniquely thriving?
In 2014, Shaanxi Coal and Chemical Industry Group (SCCG) established its positioning as a diversified enterprise with distinct coal advantages and prominent main businesses in energy and materials. This indicates that coal is the foundational industry of SCCG, representing the "source". Relying on coal conversion and utilization, clean secondary energy and applied materials are the two main businesses, representing the "flow". Leveraging technological innovation, the future main businesses will leap into the fields of new energy and new materials. With this, SCCG will have a sustainable and boundless development prospect and an industrial foundation for building a "century-old enterprise". Under this strategic positioning, the transformation and development model of SCCG can be summarized as: based on coal, advancing in both energy and materials, driven by technology and integration, undergoing transformation.
Advance and retreat in an orderly manner, optimize industrial structure
In May 2014, Shaanxi Coal and Chemical Industry Group (SCCG) proposed a development strategy aimed at eliminating non-core businesses and focusing on core competencies. During the specific implementation process, the group introduced a round of reform measures in 2014, akin to a "brave man cutting off his wrist," closing 8 pairs of mines in old mining areas and postponing or halting the construction of 4 mines. Since the implementation of the national policy to reduce overcapacity, SCCG has seized this historic opportunity to fully close 18 mines originally planned to be closed over three years within one year in 2016, withdrawing a production capacity of 18.15 million tons.
Meanwhile, through measures such as internal reduction and regional collaboration, six new high-quality capacity projects have been approved by the state in the northern Shaanxi and Binhuang mining areas, with a total construction scale of 56.2 million tons. This has enabled the group's high-quality coal production capacity to account for 95%, fundamentally optimizing the energy structure.
"Two-pronged approach to accelerate industrial upgrading"
Relying on technological innovation and capital operation as its "two wheels", Shaanxi Coal and Chemical Industry Group has established a virtuous cycle of mutual dependence and synchronized driving, engaging in both industrial development and capital operation. The Group leverages technology to lead its transformation and upgrading. By the end of 2017, it had secured a total of 350 million yuan in government technological support funds for technological innovation, won 144 provincial and ministerial-level awards, applied for 2,194 patents, and obtained 1,971 authorized patents.
In the production phase, measures such as the construction of smart mines, new water-preserving mining techniques, and the establishment of gas zero-emission mining areas have been implemented to enhance the level of intelligent equipment in mines and promote circular economy development in mining areas. Huangling Mining, a subsidiary of the group, actively implemented "domestic intelligent unmanned mining technology," marking a revolutionary milestone in the history of Chinese coal mining. Shenan Mining introduced the 110-N00 coal mining method and further innovated, exploring the third transformation in mining technology. In the consumption phase, the utilization of coal has been transformed, with a focus on developing the "coal powder - boiler - heating service" industrial chain, breaking the deadlock between coal combustion and ultra-clean emissions. The implementation of semi-coke dry quenching technology has led to the revision of new semi-coke production standards.
Leveraging the multi-tiered capital market platform, we have accelerated the cultivation of listed enterprises, signed a market-oriented debt-to-equity swap agreement worth 84.5 billion yuan with financial institutions, and the implemented amount has exceeded 45.4 billion yuan, ranking first nationwide. This has reduced the debt ratio by 8 percentage points, with the asset-liability ratio dropping to 70% by the end of 2017.
Institutional reform to break through bottlenecks and constraints
Optimizing the operation and management control system is a fundamental measure to enhance the internal driving force of enterprises and cope with market crises. In accordance with the reform direction of state-owned capital investment companies, Shaanxi Coal and Chemical Industry Group has carried out a series of reforms aimed at "returning to the headquarters, solidifying the sectors, streamlining the levels, and activating the entities" with the goal of achieving a three-tier structure of "group company-industry sector-factory and mine entities". The professionalization of sectors, the transfer of "three supplies and one industry", and the reduction of enterprise levels are progressing in an orderly manner. Among them, equity transfers, restructuring and integration, dissolution, bankruptcy, and liquidation have been carried out for 110 subordinate enterprises, reducing the number of enterprises by 50 and achieving streamlined administration, delegated power, and improved efficiency.
On April 27, 2017, the new energy company fired the first shot in Shaanxi's mixed-ownership reform. This was a beneficial "test" for Shaanxi Coal and Chemical Industry Group to seek breakthroughs in "system" and make efforts to "enhance vitality", in accordance with the requirements of the provincial six reform pilot projects, "one enterprise, one policy", and employee stock ownership pilot projects, to continuously improve the competitiveness of enterprises.
Extend the energy chain and expand the material system
Shaanxi Coal and Chemical Industry Group adheres to the principle of taking coal as the foundation, actively promoting the clean utilization of coal based on its quality, and simultaneously making timely layouts in the new energy industry.
Adhering to the coal chemical industry direction of misaligned petroleum, relying on the internationally advanced independent low-rank coal rapid pyrolysis and quality separation conversion technology, a large-scale comprehensive coal utilization and conversion project has been planned in the Yulin region, which will ultimately form a bulk material base for the production of materials such as textiles, architectural decoration, packaging, and automobiles.
In terms of new material research and new industry development, Shaanxi Coal and Chemical Industry Group has achieved 8 breakthroughs, including industrial preparation technology for nanofluid energy absorption materials, and preparation technology for ternary power batteries and their positive and negative electrode materials. These breakthroughs and transformations hold the promise for achieving the conversion and succession of old and new growth drivers.
Overseas Shaanxi Coal Group: Building an Influential Enterprise
At 16:30 Kyrgyzstan time on January 19, 2014, Shaanxi Coal and Chemical Industry Group Zhongda China Petroleum Company successfully completed the test run, and a barrel of oil was successfully produced.
On December 30, 2016, Shaanxi Coal Construction Group and relevant departments of Tajikistan successfully signed the "Partnership Agreement between State-owned and Private Entities"
In recent years, based on project construction, Shaanxi Coal and Chemical Industry Group has built a platform for interconnected and integrated development. Currently, it has participated in the planning and layout of projects in countries and regions along the "Belt and Road", including petroleum refining, coal resource exploration, coal chemical industry, and coal-electricity integration, with a total investment of nearly $1.58 billion, showcasing the brand image of Shaanxi Coal overseas.
Shaanxi Coal and Chemical Industry Group will continue to promote the construction of coal resource exploration projects in Australia, coal-electricity integration projects in Tajikistan, and comprehensive coal and steel development projects in Indonesia. It will accelerate the pace of utilizing both international and domestic markets and resources, and cultivate new advantages for active international cooperation and competition.
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