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Henan has become a large chlor-alkali industry
Over the past two years, the chlor-alkali industry in Henan Province has experienced remarkable growth. Companies such as Yuhua Yuhang Chemicals Co., Ltd., Henan Shenma Chlor-Alkali Development Co., Ltd., and Henan Hengtong Group have emerged as major players in calcium carbide-based PVC manufacturing. As a result, Henan has become one of China’s key chlor-alkali production bases, despite its inland location with limited access to coastal trade routes and coal power resources.
This development raises an interesting question: how could an agricultural province like Henan, lacking traditional advantages in logistics and energy, become a powerhouse in the chlor-alkali sector? The answer lies in a combination of strategic opportunities, resource optimization, and innovation.
The chlor-alkali industry in China is traditionally divided between the east and west. Eastern regions rely on ethylene-based processes, while western provinces, such as Xinjiang and Inner Mongolia, use calcium carbide. However, both models have faced challenges. In the east, rising crude oil prices have made ethylene-based PVC production increasingly expensive, leading to long-term losses. In the west, although calcium carbide-based production is cost-effective, the lack of local demand for by-products like caustic soda and liquid chlorine has forced companies to transport their products over long distances, increasing costs and reducing competitiveness.
Henan, with its strong cost efficiency, abundant labor, and growing industrial base, found itself in the perfect position to capitalize on these shifts. Companies like Yuhua Yuhang, which started as a small chemical plant in 2002, quickly expanded to become a major player in the calcium carbide PVC industry. By 2007, it had reached a production capacity of 400,000 tons of caustic soda and PVC, establishing itself as a competitive force in the national market.
Similarly, Henan Shenma Chlor-Alkali saw rapid growth after two major expansions in 2005 and 2006, reaching a combined annual capacity of 200,000 tons. By 2007, its sales had surged by 164% year-on-year, and profits jumped by 883%. Meanwhile, Henan Hengtong Group, the province's first PVC manufacturer, expanded rapidly through multiple stages, eventually reaching a 400,000-ton annual production capacity by mid-2007.
A major driver of this growth has been the strong domestic market. Henan's aluminum processing industry, supported by government policies, has created a large demand for caustic soda and other chlor-alkali products. This industrial cluster has not only boosted local production but also helped integrate the chlor-alkali sector into broader economic activities.
Geographic advantages have also played a role. Located at the heart of China, Henan serves as a bridge between eastern and southern markets, allowing its chlor-alkali companies to efficiently reach key consumer regions. For example, Henan Hengtong Group has established strong customer relationships in Guangdong, Zhejiang, and Jiangsu, where monthly PVC consumption reaches 3,000 tons per client.
In addition, many Henan-based companies have ventured into international markets. Yuhua Yuhang began exporting PVC in 2005, and by 2006, had set up an international trading platform, expanding its reach to 13 countries. This diversification has helped them avoid intense domestic competition and tap into global demand.
Sustainability and circular economy practices have further strengthened the industry’s appeal. Companies like Yuhua Yuhang and Henan Hengtong have adopted advanced technologies to reduce energy consumption and emissions. For instance, Yuhua Yuhang has achieved dust emissions below 100 mg/m³, far exceeding national standards, and controls vinyl chloride residual levels well under industry norms.
Henan Hengtong has also developed a unique circular model, reusing waste heat from nearby cement plants and repurposing calcium carbide slag for cement production. These initiatives have not only reduced environmental impact but also increased operational efficiency and cost savings.
Looking ahead, the chlor-alkali industry in Henan is expected to continue its upward trajectory. Shenma Chlor-Alkali aims to reach 1.2 million tons of caustic soda and PVC production within 3 to 5 years, positioning itself as a global chlor-alkali hub. Yuhua Yuhang plans to hit a million-ton scale in caustic soda and PVC, with projected sales revenue of 10 billion yuan.
In summary, Henan’s success in the chlor-alkali sector is the result of strategic timing, resource optimization, and innovative practices. It has transformed from an agricultural region into a key industrial player, proving that with the right approach, even inland provinces can thrive in high-tech, resource-intensive industries.