Guide to invest in the Petrochemical industry in Chengdu Contents 1.0 CURRENT SITUATION OF THE INDUSTRY…………………1 1.1 industrial foundation…………………………………………1 1.2 industrial chain…………………………………………………2 1.2.1 About the Industrial Chain……………………………………2 1.2.2 Major Industrial Categories…………………………………3 1.2.3 Introduction of Representative Enterprises…………………4 1.2.4 International Well-known Enterises…………………………5 1.3 market overview………………………………………………6 1.3.1 Overall Development Status of the Petrochemical Industry…6 1.3.2 Market Analysis of the Petrochemical Industry of Chengdu…6 2.0 INVESTMENT ENVIRONMENT………………………………9 2.1 human resources………………………………………………9 2.2 infrastructure…………………………………………………10 2.3 logistics…………………………………………………………11 2.3.1 Railway………………………………………………………11 2.3.2 Road…………………………………………………………12 2.4 environment protection requirements……………………14 3.0 INDUSTRIAL DEVELOPMENT PROGRAM…………………14 3.1 industrial policy………………………………………………14 3.1.1 Improve Overall Planning and Integrated Coordination……14 3.1.2 Develop and Canvass for Policies in support of the development of the Industry………………………………………………………15 3.1.3 Enhance Land Realignment to Ensure Industrial Land Using15 3.1.4 Strengthen Technology Innovation and Human Resources Exploration…………………………………………………………16 3.1.5 Actively Acquire Significant Materials Required by the Petrochemical Industry………………………………………………16 3.1.6 Strengthen Investment and Financing, and Collect Industrial Development Capitals through Multiple Channels………………16 3.1.7 Strengthen Merge and Regrouping of Enterprises, Focus on fostering Large-scale Enterprises and Groups……………………17 3.1.8 Carefully Implementing Energy Saving and Emission Reduction, Develop Circular Economy………………………………………17 3.2 industrial program……………………………………………18 3.2.1 Overarching Goal……………………………………………18 3.2.2 Development Program of Key Industrial Chain……………19 3.3 one specialty per zone…………………………………………22 3.3.1 Overview……………………………………………………22 3.3.2 Layout of the Petrochemical Industry………………………24 4.0 IMPACTS OF THE 5.12 WENCHUAN EARTHQUAKE ON THE INDUSTRIAL DEVELOPMENT OF CHENGDU…………………27 4.1 impacts of the wenchuan earthquake on the city of chengdu………………………………………………………………27 4.2 impacts of wenchuan earthquake on the petrochemical industry of Chengdu……………………………………………29 1. Current Situation of the Industry 1.1 Industrial Foundation In 2007, there were 244 petrochemical enterprises above the designated size in the petrochemical industry in Chengdu, with the overall pr operty totaling 19.251 billion Yuan, and a workforce of over 30,000 people. The sales revenue achieved in the year 2007 reached 18.225 billion Yuan, accounting for 6.5% of the total industrial sales revenue of the city; 182.25 Industrial Sales Revenue of Chengdu Industrial Sales Revenue of the Petrochemical Industry 2803.85 In 2007, the industry achieved an industrial value-added of 8.712 billion Yuan, accounting for 7.4% of that of the city, with the profits tax 175.3 billion Yuan, accounting for 5.7% of the city’s total profits tax. The products of Chengdu’s petrochemical industry involve 19 major industrial categories, with more than 1,000 types and over 2,000 specifications. The Proportion of the Petrochemical Industry in the Industrial Economic Data of Chengdu in 2007 (Unit: billion Yuan) 300 250 200 150 Industry of the Whole City 100 Petrochemical 50 Industry 8.712 0 Industrial18.225 1.753 1.179 Profits Tax Value Added Industrial Growth Major Economic Growth Indexes of the Petrochemical Industry of Chengdu (Unit: 0.1 billion Yuan) 20 Industrial Value-Added 15 Sales Revenue 10 Total Profits Tax 5 Total Profits 0 2003 2004 2005 2006 2007 Output of Major Petrochemical Products in 2007 Sodium Urea Synthetic Nitrogen Monoammonium Sulfate (Physical Ammonia Fertilizer Phosphate Anhydrous Quantity) 732,600 t 494,000 t 470,800 t 912,100 t 60,000 t Chemical Agricultural High Purity Pesticide Potassium PVC Resin Potassium Triallylamine (Original Carbonate Hydroxide Chemical) 174,600 t 39,000 t 79,600 t 6,100 t 34,700 t 1.2 Industrial Chain 1.2.1 About the Industrial Chain The Petrochemical Industry Petroleu Coking and Chemical Chemic Pharmacy Rubber Plastic m Nuclear Material al Production Product Product Process Fuel & Fiber Industry Industry Industry ing Processing Chemical Producti Industry Products on Industry Industry 1.2.2 Major Industrial Categories There are 23 enterprises currently in this industrial category, with the property totaling 5.906 billion Yuan; the sales revenue realized in 2007 was 468.2 billion Yuan, and the profits tax 408 Chemical million Yuan. The major products include synthetic ammonia, Fertilizer nitrogen fertilizer, phosphate fertilizer, urea, synthetic fertilizer, agricultural potassium nitrate, and agricultural potassium sulfate, etc. There are 13 enterprises currently in this industrial category, with the property totaling 0.644 billion Yuan; the sales revenue Farm realized in 2007 was 496 million Yuan, and the profits tax 32 Chemical million Yuan. The major products include glyphosate, mancozeb, xiaochongthion, quinalphos, azadirachtin and brassinolide, etc. There are 56 enterprises currently in this industrial category, with the property totaling 4.227 billion Yuan; the sales revenue Basic realized in 2007 was 3.228 billion Yuan, and the profits tax 303 Chemical million Yuan. The major products include high purity potassium hydroxide, sodium sulfate anhydrous, hydrogen peroxide, melamine, methanol, formaldehyde, etc. There are 36 enterprises currently in this industrial category, Paint, with the property totaling 899 million Yuan; the sales revenue Printing Ink realized in 2007 was 1.373 billion Yuan, and the profits tax 133 and Pigment million Yuan. The major products include paint, emulsion paint, printing ink and meghafast green, etc. There are 57 enterprises currently in this industrial category, with the property totaling 2.504 billion Yuan; the sales revenue Specialty realized in 2007 was 2.677 billion Yuan, and the profits tax 202 Chemical million Yuan. The major products include catalyst, chemical reagent, adhesive, lysine, amino acid, high purity helium, nitrogen tetrafluoride, etc. There are 19 enterprises currently in this industrial category, with the property totaling 1.254 billion Yuan; the sales revenue Synthetic realized in 2007 was 1.245 billion Yuan, and the profits tax 244 Material million Yuan. The major products include poly (phenylene sulfone) resin, polyvinyl chloride resin and polyurethane, etc. 1.2.3 Introduction of Representative Enterprises I. China National Petroleum Corporation (CNPC) The CNPC has invested 21 billion Yuan to found the joint venture company Sichuan Petrochemical Co., Ltd. with Sichuan Province, to build the 800,000 ton/year ethylene production program and the 10 million ton/year oil refining program. II. China Petrochemical Corporation (SINOPEC) The SINOPEC Sichuan Co., Ltd. is established by the SINOPEC in Chengdu, with an investment of 500 million RMB Yuan, engaged in the survey and exploration of the oil and gas resources in Chengdu and the neighboring areas. III. Shandong Hi-tech Chemical Group The Shandong Hi-tech Chemical Group is an equity participation company of the SEDAR Petroleum & Natural Gas Development (Sichuan) Co., Ltd., with an investment of 162 million Yuan. The Shandong Hi-tech Chemical Group mainly deals with the trading of oil products such as fuel oil and light oil for chemical industry, etc., and has built the 30,000 ton/year polypropylene production device and other auxiliary facilities. In 2006, it realized the sales revenue of 1.747 billion Yuan. In addition, there are a number of backbone enterprises, including the Sichuan Chemical Works Group, Ltd., Sichuan Gaoyu Group Co., Ltd., Chengdu Huarong Chemical Co., Ltd., Chengdu Zhengguang Investment Group Co., Ltd., and Chengdu Rongguang Carbon Co., Ltd., etc. 1.2.4 International Well-known Enterprises World Top 10 Ethylene Production Enterprises in 2006 Unit: 1,000 ton/year Productivity of the Ownership Number of Rank Company Entire Combined Capacity of the Factories Device Company 1 Dow Chemical Company 14 13,155 10,370 2 Exxon Mobile Corporation l5 11,460 8,327 Saudi Basic Industries 3 7 8,985 7,182 Corporation 4 Shell Group 10 8,945 6,821 5 SINOPEC 9 6,295 6,145 6 INEOS Group 8 6,546 5,09l 7 Lyondell Chemical Company 6 4,880 4,880 Chevron Phillips Chemi- 8 4 3,956 3,701 cal Company 9 TotalSA (TOT) 9 5,523 3,327 10 BASF Group 7 4,955 3,109 1.3 Market Overview 1.3.1 Overall Development Status of the Petrochemic- al Industry Since 2006, under the situation that the prices of crude oil and natural gas vibrate at a high level all over the world, the world petrochemical industry has entered a period of readjustment at a high price. The productivity growth of major petrochemical products of the world rise again slightly, the demands for petrochemical products remain vigorous, and the prices of most petrochemical raw materials and products pick up continuously. Meanwhile, the development center of gravity of the global petrochemical industry continues moving eastwards, with the development of the North America and West Europe maintains basically stable, and the petrochemical industry of Asia-Pacific and Middle East continues growing rapidly. In recent years, the petrochemical industry of China continues developing fast and healthily under the support of the relatively fast growth of the world, esp. the Chinese economy, and has become a major motive force of the development of the global petrochemical industry. 1.3.2 Market Analysis of the Petrochemical Industry of Chengdu Chengdu abounds in natural gas deposits, among other resources; being the largest water and electricity industry base, Chengdu has plenty of industrial water and electricity supplies. With developed airway, railway and road systems, Chengdu is a significant transportation pivot in West China, casting great radiation influence on the Southwest China region. As the basic material of the oil refining and chemical industry, the crude oil is transported into Chengdu stably and safely in pipelines through the Republic of Kazakhstan and Xinjiang Autonomous Region. In 2007, the Sichuan Province stepped into the ranks of the strong provinces of economy whose GDPs were over 1,000 billion RMB Yuan. And the city of Chengdu accounts for one third of the total economic value of the whole province, with a solid economic foundation. The market system of Chengdu is relatively complete, and the civil economy is developed, with the value-added realized by the civil economy accounting for 50.9% of the GDP of the whole city, which has brought capital as well as energy to the development of the petrochemical industry. In 2007, the state formally approved Chengdu to establish a national experimentation zone of the comprehensive reform for the coordinative development of urban and rural areas. Additionally, Chengdu has a large capacity to offer broad space of development for the petrochemical industry. The city of Chengdu is a processing base for electronics, machinery, automobile, medicine, leather shoes, furniture, light industry and construction materials, etc., and according to preliminary estimates, by the year 2015, the market demands for polyethylene would be 680,000 tons, polypropylene 370,000 tons, polyvinyl chloride 870,000 tons, polystyrene 150,000 tons, synthetic rubber 210,000 tons, ethylene glycol 450,000 tons, terephthalic acid (PTA) 1.2 million tons. The completion and operation of the Sichuan Petrochemical programs will provide Chengdu with large amounts of finished-product oil, synthetic resin, synthetic rubber and benzene, p-xylene, etc. among other organic chemical industrial materials; by reconstruction and expansion, it can also provide a certain ethylene and propylene materials, in support of the development of the downstream petrochemical processing of Chengdu. Presently, the 10 million-ton oil refining program as well as the 800,000-ton ethylene program invested by CNPC have been approved by the relevant departments of the state, and are estimated to be completed and put into operation by the end of 2010, providing the material guarantee for investing in and developing petrochemical industry in Chengdu. The materials that can be provided by the 10 million-ton oil refining program and the 800,000-ton ethylene program of the CNPC are shown in the following table: 序号 Materials Amount（1,000 tons） 1 Polypropylene Products 1,020 2 Benzene 370 3 P-xylene 600 4 C5 110 5 C9 50 6 Butyl-octyl Alcohol 330 7 Ethylene Oxide 50 8 Light and Heavy Fuel Oil 180 2. Investment Environment 2.1 Human Resources Chengdu possesses a collection of country famous universities, as well as research and engineering institutes, with strong scientific and technological capabilities and enormous talents, which makes it influential in Southwest China, if not the whole country. Located in the Xindu District of Chengdu, this university Southwest focuses on the petroleum, natural gas subjects and the Petroleum related ones, with 22,408 full-time students currently University studying in it. Located in Chengdu City, this university is a high-level researching comprehensive university, positioned in West China by the state, with chemistry, chemical industry and other relevant subjects; currently there are over 40,000 Sichuan University full-time students in the university, over 21,000 postgraduate or doctoral candidates, and 1,042 foreign students and students from Hong Kong, Macau and Taiwan. Located in Chengdu City, it is a national key university focusing on engineering, with the subjects of engineering, Southwest Jiaotong science, administration, economy, culture and law, etc. University developing coordinately, and has fostered nearly 200,000 graduates. Located in Huayang, Chengdu, it opens petroleum drilling, petroleum mud, internal combustion engine, natural gas Sichuan Petroleum purification, and natural gas extraction and transmission, School etc., among other subjects. Currently there are more than 2,000 students studying in the school. Reference Salary Level for Foreign Investment Enterprises (Manufacturing Industry) in Chengdu Position RMB Yuan/Month ● Senior Executive Level(Factory Manager) 2300-5000 ● Department Manager Level (Financial Controller, Log- 1800-4000 istics Manager, etc.) ● Engineer (with two years’ experience) 1500-3000 ● Engineer (without two years’ experience) 1250-2500 ● Technician/Director (with two years’ experience) 860-1500 ● Skilled Operator (with two years’ experience) 700-1500 ● Moderately Skilled Operator (with one year’s experience) 600-1300 ● Green-hand Operator (new graduates from vocational 580-1000 schools) 2.2 Infrastructure The petrochemical industry relies heavily on raw materials, and has extremely high requirements on water, electricity and gas, etc. among other resources. Therefore, emphasizing key elements guarantee is requisite for promoting the healthy and fast development of the petrochemical industry. Resources and Energy Key Elements to Be Guaranteed Development Natrual Unit Land Water Electricity Timeframe Gas 4,000 1.8 billion 2008-2012 4 km2 260,000kW Sichuan Petrochemical t/hour m3/year Base 5,000 1.9 billion 2012-2017 2.4 km2 320,000kW t/hour m3/year Pengzhou Plastic 50,000 3,000 Science & Technology 2008-2017 5.3 km2 130,000kW t/day m3/day Industrial Park 2,500 400 million Expansion of Zone B 2008-2012 2 km2 150,000kW t/hour m3/year of Xinjin Industrial 4,000 700 million Park 2012-2017 3 km2 200,000kW t/hour m3/year There is a total water deposit of more than 26 billion m3, and the tap water productivity is 2.2 million m3/day, with the water quality meeting GB57-84, and the price of the industrial tap water Water is 2.7 RMB Yuan/m3 (including the effluent fee). The diameter of the road main water pipe is 300 mm, with the hydraulic pressure over 0.275 MPa. The annual power supply of Chengdu is about 13.2 billion kWh. The price is consistent with the Electricity current electricity price for major industry (1-10 kV) (0.57 Yuan/kWh in average). The total supply of natural gas in Chengdu is 2.52 billion m3; the price natural gas for industrial Natural Gas production is 1.66 RMB Yuan/m3. 2.3 Logistics 2.3.1 Railway (1)Chengdu is the largest railway pivot in Southwest China, where converge the four major railway trunk lines including Chengyu, Baocheng, Chengkun and Dacheng lines, with four major railway cargo sites currently in operation, including the Chengdu East Station, Chengdu South Station, Chengdu West Station, and Qingbai Jiang Dawan Station. (2) In April, 2007, the Chengdu North Marshalling Yard on which the Ministry of Railways invested 1.7 billion Yuan was formally put into operation. (3) The Ministry of Railways plans to invest 1.17 billion Yuan in the Qingbai Jiang District to build the largest railway international containers terminal in Asia, with a designed annual throughput of 2.2-2.5 million standard containers, estimated to be put into operation in the first half of 2009. Railway Container Transportation Prices Unit: Yuan Destination 1 ton 10 tons 20 tons 40 tons Shenzhen North 236.65 2960.57 5997.09 11112.38 Railway Station Yangpu, Shanghai -- 2208.84 4499.55 8326.43 Northern Suburb of 174.3 2198.34 4477.74 8287.82 Shanghai Tianjin North 159.74 1982.64 4098.85 -- Railway Station Tianjin Port -- -- 4195.97 7519.42 Tianjin South 160.04 1986.74 4107.55 -- Railway Station Lianyun Gang -- -- 3993.91 7178.12 2.3.2 Road There are altogether eight national trunk highways and national highways that go through Chengdu or begin here, including two national trunk highways (the highway from Erlian Haote, Inner Mongolia to Hekou, Yuannan; the highway from Shanghai to Chengdu), and six national highways (Route 108 from Beijing to Kunming, Route 213 from Lanzhou to Mohan, Route 317 from Chengdu to Naqu, Route 318 from Shanghai to Zhangmu, Route 319 from Xiamen to Chengdu, and Route 321 from Guangzhou to Chengdu). The city of Chengdu is the strong point for the road networks of Sichuan Province. Basic Information of the Container Transportation Roads from Chengdu to Ports Port of Mileage Time Container Price (Yuan) From/To Route Destination (km) (hour) Size One way Chengdu-Xi’an- Chengdu- Yangshan Shangqiu-Nanjing- 2,508 2 days 40 feet 12,500 Shanghai Port Suzhou-Shanghai Chengdu-Chongqing- Chengdu- Yantian Port Guiyang-Nanning- 2,400 2 days 40 feet 13,000 Shenzhen Guangzhou-Shenzhen Chengdu-Xi’an- Chengdu- Tianjin Port Shi Jia Zhuang- 2,230 2 days 40 feet 12,500 Tianjin Zhenzhou-Tianjin Chengdu- Chengdu-Xi’an- Lianyun Lianyun Shangqiu-Lianyun 2,491 2 days 40 feet 13,000 Gang Port Gang Gang 2.4 Environment Protection Requirements Environment Quality Standards Effluent Standards for Pollutants Wastewater Discharge: implementing the Level Three standard of the Ambient Air: implementing the secondary “Integrated wastewater discharge standard of the “Ambient Air Quality standard” GB 8978-1996. Standard” GB 3095-1996; Waste Gas Discharge: implementing The hydrogen chloride (HCl), ammonia the secondary standard, emission limits (NH3), sulfuric acid mist, chlorine (Cl2) will of air pollutants for new pollution implement the Hygienic Standards for the sources of the “Integrated Emission Design of Industrial Enterprises (TJ36-79) to Standard of Air Pollutants” GB comply with the maximum allowable density 16297-1996. of the harmful matters in the air for residence Ammonia (NH3): implementing the areas. “Emission Standard for Odor Pollutants” GB 14554-93. Flue Gas of Natural Gas Boiler: Surface water will implement the implementing the secondary regional Category III waters standard of the standard of the “Emission Standard of “Environmental Quality Standards for Surface Air Pollutants for Boilers” GB Water” GB 3838-2002. 13271-2001. Sound Environment: implementing the Boundary Noise: implementing the Category III standard of the “Standard of Category III standard of the “Standard Environmental Noise of Urban Area” GB of Noise at Boundary of Industrial 3096-93. Enterprises” GB 12348-90. 3. Industrial Development Program 3.1 Industrial Policy 3.1.1 Improve Overall Planning and Integrated Coordination Fully develop the function of overall planning and integrated coordination of the Chengdu Municipality. Led by the Chengdu Municipality, and with the coordination of the relevant departments and local governments, the industrial development program will be tailored properly, to focus on building the Sichuan Petrochemical Base, Pengzhou Plastic Science & Technology Industrial Park, and the Extension Zone of the B Zone of the Xinjin Industrial Park, making an industrial cluster development posture. 3.1.2 Develop and Canvass for Policies in support of the development of the Industry Actively canvass for the policy support of the state as well as the Sichuan Province, carefully explore and develop policies and measures to support the development of the petrochemical industry, encourage and guide foreign investment enterprises, state-owned and civil-run ones to conduct industrial agglomeration and consolidation, and to move into the chemical industry concentrating development zone. Meanwhile, establish entry norms in energy saving, resources preserving and environment protection, and enforce them strictly. 3.1.3 Enhance Land Realignment to Ensure Industrial Land Using According to the requirements of the petrochemical industrial development, create new approaches of land utilization, plan industrial land using as a whole, clear up idle land, activate potential land, check up the actual land using of the program, make proper deviation for the important programs that are consistent to the development guidance of the city’s petrochemical industry, to ensure large and key programs to settle in Chengdu. Actively advance the park- and base-oriented construction, to create favorable conditions for enterprises moving into the industrial park. 3.1.4 Strengthen Technology Innovation and Human Resources Exploration Fully develop the comparative advantage of the city in technology, strengthen the combination between industry, college and institute, promote independent innovation, and emphasize the development of high-tech and high value-added sophisticated chemical industrial products, promoting the optimizing and upgrade of the industrial structure. Speed the development of favorable policies for introducing petrochemical talents to Chengdu, actively introduce excellent petrochemical talents home and abroad, and at the same time, vigorously foster talents, employ them properly, and allow them fully develop their capabilities. 3.1.5 Actively Acquire Significant Materials Required by the Petrochemical Industry Take full advantage of the joint venture partnership between Chengdu Municipality and the CNPC, and issue long-term, stable material supply compacts with it, to reserve materials in Chengdu for developing downstream industries. Actively participate in the reconstruction and expansion of the oil-refining and chemical programs, striving to have local areas keep a certain ethylene and propylene deposits for developing more fine chemical industrial products. 3.1.6 Strengthen Investment and Financing, and Collect Industrial Development Capitals through Multiple Channels Expand channels for investment and financing, and collect industrial development capitals through multiple channels, to absorb more civil capitals to invest in the oil and gas chemical industrial programs. Actively construct the bank-enterprise cooperation platform, and recommend credible and promising enterprises and programs to the financial institutions, to win the credit support and quality financial services of the financial institutions. Improve the construction of the financial guarantee system, render greater support to the market listing of priority fostered enterprises, guide the enterprises to raise funds through the capital market, and support them to collect capitals through market listing to develop bigger and stronger. 3.1.7 Strengthen Merge and Regrouping of Enterprises, Focus on fostering Large-scale Enterprises and Groups Support the enterprises to realize the concentration of effective resources to advantageous enterprises, through asset restructuring, share-holding and share-controlling, etc., to form a virtuous development circle. 3.1.8 Carefully Implementing Energy Saving and Emission Reduction, Develop Circular Economy Further improve the index, monitoring and examination system for energy saving and emission reduction, and implement the rating and examining responsibility system for energy saving and emission reduction. Adopt various measures, including fund awards, to encourage the enterprises to enhance human and capital investment in security and environment protection, etc. Speed the improvement of desolate production capacity elimination system, launch decisive and effective measures on high energy consumption, high pollution enterprises as well as those who are not consistent with the safe environment protection requirements, to eliminate them completely. Actively advance clear production techniques of the chemical industry, encourage the comprehensive utilization of chemical industrial wastes, and vigorously develop the circular economy, realizing sustainable development. 3.2 Industrial Program 3.2.1 Overarching Goal Based on the 10 million-ton oil-refining and 800,000 ton-ethylene production already approved by the state, and if the environment capacity allows, develop to a production scale of 12 million-ton oil-refining, one million-ton ethylene, one million-ton aromatic hydrocarbon, one million-ton PTA, and 500,000-ton polyester by the year 2017; forging the comprehensive industrial park area focusing on the integration of refining and chemical industry in the Sichuan Petrochemical Base (Pengzhou) with priority, construct the expansion of Zone B of the Xinjin Industrial Park, gradually foster the Qionglai Salt & Natural Gas Chemical Industrial Concentration; by 2017, have the investment scale of petrochemical industry of Chengdu achieve 86 billion Yuan, and the sales revenue of the whole petrochemical industry in Chengdu 250 billion Yuan, and by the year 2020, 100 billion Yuan and 300 billion Yuan respectively, accounting for approximately 15% of the GDP in the Chengdu area. From 2008 to 2017, the annual development objectives of the petrochemical industry of Chengdu are shown in the following table: Annual Development Objectives of the Petrochemical Industry of Chengdu Annual Objectives （Year） 2008 2009 2010 2012 2017 Industrial Value-Added 11.7 13 15 50 80 (billion Yuan) Sales Revenue 24 30 38 130 250 (billion Yuan) Profits Tax 2.2 2.7 3.5 15 30 (billion Yuan) 3.2.2 Development Program of Key Industrial Chain Make use of the 10 million tons of crude oil transmitted into Sichuan through pipelines from Xinjiang Autonomous Region, processed through atmospheric and vacuum distillation, Oil-refining hydro-cracking, residual hydro-desulfurization, (gas) diesel Industrial hydro-fining, catalytic cracking, gas separation, and Chain reforming, etc., to produce quality gasoline, diesel, aviation kerosene, and quality materials for developing ethylene and aromatic hydrocarbon programs. Ethylene raw materials such as naphtha will be processed through the cracking unit and the butadiene extraction unit to produce ethylene, propylene, and butadiene; the ethylene will Alkene be further processed into high density polyethylene (HDPE), Industrial linear low density polyethylene (LLDPE) and ethylene Chain oxide/ethylene glycol (EO/EG); the propylene is further processed into polypropylene (PP) and butyl alcohol and octyl alcohol; and the butadiene is further processed into cis-1， 4-polybutadiene rubber. Depentanized naphtha will be put into the aromatic Aromatic hydrocarbon united plant, and processed through aromatic Hydrocarbo extraction, absorption and separation, disproportionation and n Industrial transalkylation and isomerization, etc., to get benzene, Chain p-xylene and o-xylene products. The benzene chain: with benzene as the raw material, hydrogenate to generate cyclohexane, which is in turn nitrified into adipic acid, which can be used to produce polyamide Benzene/p-x (nylon 66) with hexanediamine; the cyclohexane can be used ylene/o-xyl to produce caprolactam (nylon 6) with ammonia. And they can ene be made into nylon 66 chips and nylon 6 ones respectively Industrial (synthetic fiber and engineering plastic). Chain The p-xylene chain: the p-xylene can be oxidized to produce terephthalic acid (PTA), and PTA can synthesize with ethylene glycol into polyester (PET); the PTA can polymerize with 1,3-propanediol to produce poly (trimethylene terephthalate) (PTT); the PTA can polymerize with 1,4-butanediol to produce thermoplastic polyester engineering plastic, Polybutylene Terephthalate (PBT); the PBT can polymerize with aliphatic polyester or polyether block to produce thermoplastic polyester elastomers. The o-xylene chain: the o-xylene can be oxidized to produce phthalic anhydride, which reacts with octyl alcohol to produce dioctyl phthalate (DOP) and reacts with butyl alcohol to produce dibutyl phthalate (DBP) plasticizer; the o-xylene can also polymerize with maleic anhydride, styrene, propanediol, diethylene glycol, etc. to produce unsaturated polyester resin (UPR). Ethylene and benzene together may produce styrene, which can be polymerized to produce the polystyrene resin (PS); the styrene polymerizes with butadiene to produce rubber Styrene elastomer SBS; styrene and propylene/ester can produce Industrial styrene-acrylic emulsion; styrene and methyl methacrylate Chain (MMA)/butadiene can produce engineering plastic and the addictive methyl methacrylate-butadiene-styrene copolymer (MBS). The propylene can be oxidized into acrylic acid, which can Acrylic Acid produce methyl methacrylate, ethyl acrylate, n-butyl acrylate and Ester and 2-ethylhexyl acrylate with methanol, ethanol, n-butanol Industrial and octanol. The acrylic acid may be used to produce super Chain absorbent polymer and fine chemical products. The phenol and acetone may be used to produce special Phenol-Acet phenolic resin; the phenol and acetone may synthesize into one bisphnol A, which is further used to produce polycarbonate Industrial (PC) engineering plastic; the bisphnol A and epichlorohydrin Chain together may produce thermosetting synthetic materials such as epoxy resin, etc. The polyethylene, polypropylene, polystyrene and PVC are the materials primarily used for developing programs of plastic accessories, containers, plastic construction materials, Plastic-Rubb BOPP films, nonwovens, transparent polypropylene sheets, er Processing communications cable specialty, and constructional water Industrial supply specialty, etc. The rubber processing industry focused Chain on polybutadiene rubber, mainly develops tyre, new-type rubber synthetic materials, new daily products, high-grade soles and cases, etc. The rich natural gas resources in Chengdu and the neighboring areas may be utilized to produce high quality fertilizers such as the high density, compound, high-effect and specialty fertilizers, etc. The urea is further processed into synthetic rsins such as triallylamine, amino resin and urea-formaldehyde Natural Gas resin, etc.; the natural gas is the material for developing dimethyl Chemical carbonate, paraformaldehyde and 1,4-Butanediol, etc. ; the Industrial natural gas is also the material for producing hydrocyanic acid, Chain which is further used to produce a series of fine chemical products such as N-phenyl amino acetonitrile, sodium ferrocyanide and iminodiacetonitrile, etc., among which the iminodiacetonitrile can be used to produce the glyphosate pesticide. Focus on developing the new-type silicon material industry, Silicon produce trichlorosilane with chlorine byproducts as raw material, Material and further process the trichlorosilane into polysilicon; Industrial comprehensively utilize the materials to develop the fumed silica; Chain vigorously develop the silicofluoric organic material, forming a circular economic silicon material industrial base. Potassium Based on the Potassium-Rich Brine resource advantage of the Chemical city of Qionglai, develop the potassium industrial chain, with Industrial priority in the development of high value-added potassium Chain chemical products such as the potassium chloride, high purity potassium hydroxide, potassium carbonate, agricultural potassium nitrate and potassium sulfate, and potassium phosphates, etc., form a distinctive potassium chemical production base. 3.3 One Specialty per Zone 3.3.1 Overview In accordance with the objectives of the “Tentative Suggestions on Speeding the Construction of the Industrial Concentration Zones by the Chengdu Municipality”, insist on the principles of scientific development, scientific construction and scientific management, further optimize the program of industrial concentration development zones of the city, speed the construction of infrastructure and supporting facilities, innovate on the management system and operation mechanism, to form industrial concentration development zones with distinctive industrial characteristics, complete supporting functions, high load-bearing capacity, and the sustainable development capability. By 2010, the industrial value-added of the industries above designated size in the industrial concentration development zones of the city shall exceed 130 billion Yuan, with the industrial concentration degree over 70%. At least 10 industrial concentration development zones with an annual sales revenue over 10 billion Yuan shall be completed, and at least 5 of them shall have an annual sales revenue over 30 billion Yuan. The value-added of the industries supported with priority in the industrial concentration development zones shall account for 70% of the entire value-added. Industrial Orientation of the “One Specialty per Zone” program of the Industrial Concentration Development Zone of Chengdu Industrial Industries Supported with No. Concentration Taboo Industries Priority Development Zone Chengdu High-tech Electronic Information (inclusive 1．Sugar making 1 Zone software) and bio-medical industry 2．Gourmet Powder Modern manufacturing focusing on Manufacturing Chengdu Economy (not inclusive the automobile whole-car (inclusive 2 & Technology of engineering machinery) and of packaging) Development Zone 3．Printing &. supporting accessories Chengdu Dyeing 3 Petrochemical Industry 4．Leather Tanning Petrochemical Base Enterprise headquarters focusing on 5．Artificial Oil 4 Jijiang District innovation designing and electronic Production information services 6．Coking Enterprise headquarters focusing on 7．Nuclear Fuel 5 Qingyang District Processing the aviation die industry Enterprise headquarters focusing on 8．Metal Smelting 6 Jinniu District (not inclusive of the electronic information services Enterprise headquarters focusing on calendaring 7 Wuhou District light industrial designing and process) software development Enterprise headquarters focusing on 8 Chenghua District electrical and mechanical research and development 9 Wenjiang District Electronic machinery industry Qingbai Jiang Metallurgy and construction 10 District material industry Precision machinery manufacturing 11 Xindu District industry (Xinfan Town: furniture industry) Electricity & Machinery and 12 Dujiangyan City Software Industry 13 Pengzhou City Plastic Manufacturing Industry 14 Qianglai City Natural Gas Chemical Industry Light Industry Focused on Shoes 15 Chongzhou City Making New-type Construction Materials 16 Jintang County Manufacturing (Huaikou Town: Textile & Shoes Making Industry) Photovoltaic/photo-electricity and 17 Shuangliu County machinery and electricity Industry Precision machinery and electricity manufacturing industry (Ande 18 Pi County Town: Sichuan Cuisine main and subsidiary material processing industry) Light industry machinery 19 Dayi County manufacturing industry Food & drink manufacturing 20 Pujiang County industry Chemical industries based on new 21 Xinjin County energy and new materials 3.3.2 Layout of the Petrochemical Industry The petrochemical industry of Chengdu takes on a layout of “one base, two parks and two sites”. Spatial Layout of the Petrochemical Industry of Chengdu One Base Two Parks Two Sites Sichuan Pengzhou Plastic Qionglai Salt & Petrochemical S&T Industrial Natural Gas Base (Pengzhou) Park Chemical Industrial Expansion of Concentration Site ZoneB of the Qingbai Jiang Xinjin Industrial Natural Gas Park Chemical Industrial Concentration Site 4. Impacts of the 5.12 Wenchuan Earthquake on the Industrial Development of Chengdu 4.1 Impacts of the Wenchuan Earthquake on the city of Chengdu In 2007, the GDP of the three disaster stricken counties/cities of Chengdu accounted only for 9% of that of the whole city. And the impacts on the urban area and significant industrial development zones of the city were relatively small. Except the main disaster areas, enterprises in other areas of Chengdu bore relatively slight losses. By June 2nd, 94.82% of the industrial enterprises above designated size of Chengdu City had restored normal production. The Chengdu Plain lies in the west of the Sichuan Basin, and on the west rim of the Yangtze Block in geo-tectonics. The Yangtze Block is a stable block, and none of the three fault zones of Sichuan Province is in the Yangtze Block, nor are they in the Sichuan Basin or Chengdu Plain. Therefore, there is no possibility of any major earthquakes to occur in Chengdu. Experts’ Comments: “Since the Wenchuan Earthquake has allowed the energy accumulated by the earth’s crust to release, so in 200 years’ time, there would not be any earthquakes ≥ Ms 8.0 to occur in Chengdu, and the city will remain safe for at least 200 years.” --- Prof. Liu Baojun, China’s Famous Geologist, Academician of the Chinese Academy of Sciences “The low gliding rate of the Longmen Shan fault zone will also cause the prolonging of the strong earthquake recurrence cycle, so it is estimated that the recurrence interval of earthquakes ≥8Ms in the Longmen Shan fault zone is at least 3,000 to 5,000 years.” ---Mr. Zhang Peizhen, Director of the Institute of Geology, China Earthquake Administration, and Chief of the Research Group on Earthquake Construct of the North-South Belt, National Wenchuan Earthquake Specialists Committee 4.2 Impacts of Wenchuan Earthquake on the Petrochemical Industry of Chengdu Both the CNPC and the SINOPEC have expressed publicly, that according to initial checking, no evidence shows that the Wenchuan Earthquake brings major accidents to their local enterprises. The earthquake didn’t produce serious impacts on the oil pipelines of the CNPC in Sichuan area. July 10th, the Air Liquide Corporation of France signed a formal investment compact with the Chengdu High-tech Zone, investing USD 70 million to produce industrial gases. Up to now, the strategic position of Chengdu as the development center in West China did not change; the living and industrial environment of Chengdu is still favorable; and the industrial foundation, market and the government administration of Chengdu remain unchanged.