Workers at one of Wanwei Group's plants based in Hefei, capital of East China's Anhui province. Provided to China Daily

Innovation key at world's largest polyvinyl alcohol producer

As China's chemical materials industry faces various challenges, Anhui Wanwei Group Co Ltd refuses to follow the traditional route. Instead, it has chosen innovate.

As China's largest polyvinyl alcohol producer, the state-owned enterprise headquartered in Hefei, capital of East China's Anhui province, experienced many challenges as well as gains since its was founded in 1969.

The company was first established as the Anhui Vinylon Plant in the early 1970s and reorganized into the current group in 2002.

Construction on the plant was started in early 1970, but it was not completed until 1978 because at the time was under development and its technological level was low.

Upon completion, the enterprise had total assets of 170 million yuan ($27.68 million; 21.5 million euros) and an annual vinylon fiber production capacity of 7,000 metric tons along with 10,000 metric tons of PVA.

By the end of 2013, the group had total assets of 6 billion yuan, with annual revenues of about 4 billion yuan and net income of some 30 million yuan.

Wanwei Group became the one of the first state-level high-tech enterprises in 2008 and a key company in the China Torch Program, a technological innovation initiative by the former Ministry of Science and Technology.

"In the 1980s and 1990s, peer companies in the industry didn't quite understand the importance of competition and innovation," says Wu Fusheng, chairman of Wanwei group.

In 1989, the company had to stop production of vinylon fiber due to low market demand. PVA became the plant's only product, and many workers had to stay home and faced an uncertain future.

Despite the big challenge, the plant refused to give up. It organized a large number of technicians to research industrial applications for PVA fiber and finally made a breakthrough three years later.

Its high-strength and high-modulus polyvinyl alcohol fiber has since been well recognized on the market both at home and abroad, including Europe, America, Southeast Asia and Africa, as it can resist acid, alkali, aging, corrosion and ultraviolet rays.

In 1997, Wanwei group's PVA fiber was formally identified as a high-tech product by Anhui provincial government and was awarded the province's top prize for scientific and technological innovation.

In 2012, the group invented a new type of PVA fiber that prevents concrete from cracking. The product was soon used in several major dam projects in China and then listed as a national key new product by the government.

It is now one of Wanwei Group's main products with 35,000 metric tons produced every year, the largest capacity among all Chinese manufacturers. Now 70 percent of the high-tech PVA fiber exported from China is made by the company, a ratio it has maintained for five consecutive years.

In addition, the company has PVA production capacity of 250,000 metric tons and manufactured more than 160,000 metric tons in 2013, which made it the world's second-largest provider.

In 1995, China's domestic demand for PVA climbed sharply. Producers expanded PVA production, leading to overcapacity and a decline in prices.

China has both the largest production capacity and market demand for PVA products, mostly standard types. Special high-value PVA products are mainly imported from other countries.

In 2003, the company organized technicians to research specific types of PVA products with various degrees of alcoholysis and polymerization. The new products not only meet the demands of the domestic market, but also are exported to 46 countries and regions across the world.

As a result, the company was again awarded the top prize for scientific and technological innovation by the provincial government in 2011.

As many peer companies struggle to survive, Wanwei Group still aims to increase its PVA and PVA fiber production in the next few years, strengthening its market share to 40 percent and 70 percent respectively.

Prices for the group's PVA products are generally 200 to 500 yuan higher per metric ton than other companies.

"To seek more sustainable development, we have to upgrade the business and diversify our products from the other competitors' with market-oriented approaches," says Wu.

As a major step toward the goal, Wanwei group established the world's first biomass production line in Southwest China's Guangxi autonomous region to produce chemical materials using the autonomous region's abundant biomass resources.

The new company, Guangxi Guangwei Chemical Industry Co Ltd, is now one of the core subsidiaries of the group.

The plant produces most of China's high-end ethylene, vinyl acetate, ethylene vinyl acetate and PVA products with lower impurities. It is more environmentally friendly as it consumes less energy and produces less waste.

The group also acquired an 80 percent stake in an Inner Mongolia autonomous region-based company in 2010, which established the world's largest single PVA production line, able to produce 100,000 metric tons of PVA products a year.

Inner Mongolia has abundant calcium carbide and coal, which makes the company more competitive in production costs with the traditional PVA manufacturing.

Contact the writer through zhulixin@chinadaily.com.cn

(China Daily European Weekly 09/26/2014 page22)