Nearly 20 listed enterprises involved in shutdown mostly concentrated in Jiangsu

At the end of June, heavy rains frequently occurred in Jiangsu Province during the Meiyu season. In the weather forecast, the next few days in Rudong County, which is close to the Yellow Sea, will hardly see sunny days.

Rudong Yangkou Port Economic Development Zone, a chemical plant with an annual output value of more than 500 million yuan, Jiangsu Changjiu Agricultural Science and Technology has temporarily stopped production. The company recently received a notice from the Emergency Management Bureau of Rudong County, Jiangsu Province, and the Administrative Committee of the Economic Development Zone of Dongyangkou Port. The company needs to suspend production in order to deal with potential safety hazards. Changjiu Agricultural Science and Technology Co., Ltd. is a subsidiary of ST Changjiu, a listed company, with an acrylamide production line of 50,000 tons per year. After the shutdown and rectification, the production safety supervision department also needs to examine and approve to resume production. There are 337 chemical listed companies in A-share market. According to incomplete statistics, from March to June 2019, nearly 20 listed chemical companies, such as ST Changjiu, Fengshan Group and Nanjing Chemical Fiber Company, issued a stop-production announcement. Zhao Hua, a chemical expert in Jiangsu Province (not his real name), told reporters that at present, Nantong, Yancheng and other places of chemical industry collective shutdown and rectification, follow-up production situation needs to wait for the collective acceptance of the government. By the end of June, Jiangsu Province had completed a full round of safety inspection for chemical enterprises. Behind some companies waiting for resumption of production, some companies choose to relocate, and some listed companies are already seeking restructuring.

Changjiu Agricultural Science is located in Rudongyangkou Port Economic Development Zone, Jiangsu Province. The long-term operation of ST relies heavily on Changjiu Agricultural Science. According to the data, the operating income of ST Changjiu in 2017 and 2018 was 553 million yuan and 528 million yuan respectively, and the net profit was 26.13 million yuan and 8.01 million yuan respectively. In 2018, the operating income of Changjiu Agricultural Science and Technology Company was 510 million yuan, and its net profit was 17.64 million yuan.

Shutdown has a direct impact on the long-term sustainable operation of ST. ST Changjiu said that the company is still unable to adopt a decentralized strategy to reduce the risk of shutdown. If the local safety supervision department approves the resumption of work beyond the company's expectations, the negative impact of temporary suspension on the company's business income will increase year-on-year with the increase of actual suspension time. If the company has not been granted the resumption of work for a long time, the company's sustainability will face certain risks.

June 28, the reporter called ST Changjiu, the telephone was not connected. Then contacted Changjiu Agricultural Science, the other side said that the company has stopped production, the need to rectify the "new automatic cut-off valve or interlocking device" has been purchased, and installed, "like the valve at home is broken, (re) just fit it."

ST Changjiu Announcement said that Changjiu Agricultural Science and Technology strives to complete the preliminary installation and commissioning work by 30 June, and plans to complete the aforementioned safety device renovation work within 15 days from the date of announcement disclosure, and formally submit the application for resumption of production to the local safety production supervision department after the renovation is completed.

Changjiu Agricultural Science said that the company had submitted acceptance reports and was still waiting for acceptance by relevant departments. For the time of resumption, it said that it was waiting for the local government to notify that "the whole round of inspection is over". Zanyu Technologies, a listed company in Rudongyangkou Chemical Industrial Park, announced in May that its holding subsidiary Nantong Kaita Chemical Technology Company had stopped production for inspection and rectification since April 9. Journalists found that since March this year, at least 17 listed chemical companies have announced that their companies or their subsidiaries are involved in shutdown, and most of the shutdown factories are concentrated in Jiangsu. This is related to the regional distribution of listed chemical companies. According to Wind data, according to Shenwan industry classification, there are 337 chemical enterprises in A share. Among them, there are 61 in Jiangsu Province, accounting for 18.10%; 43 in Zhejiang Province, accounting for 12.76%; 36 in Shandong Province, accounting for 10.68%; 34 in Guangdong Province, accounting for 10.09%. In Yancheng, Jiangsu Province, the listed companies of Fengshan Group and Huifeng Agriculture stopped heating due to the safety overhaul of the heating company in the park. The two companies temporarily suspended the production of the original drug synthesis workshop, and used the suspension to carry out safety production inspection. In addition, Huaian Chenhua New Materials Co., a wholly-owned subsidiary of Yangzhou Chenhua, a listed company, has stopped production since May 28 this year. 

Zanyu Science and Technology mentioned that the suspension and rectification of production is the implementation of the requirements of Soviet Office (2019) 96 of the General Office of Jiangsu Provincial Committee. The above "Soviet Office (2019) 96" refers to the notice issued by the General Office of the Jiangsu Provincial Committee and the Provincial Government on the "Jiangsu Province Chemical Industry Safety and Environmental Protection Improvement Program". The announcement shows that in order to learn the lessons from the "3.21" particularly serious explosion accident of Xiangshui Tianjiayi Chemical Co., Ltd., the provincial Party Committee and the provincial government decided to immediately carry out the actions of improving the safety and environmental protection of the chemical industry in the province. After issuing the documents, Jiangsu Province began to further investigate the enterprises below the scale and assess the risks of safety and environmental protection. All enterprises that fail to meet the standards should close down and withdraw before the end of 2020. Enterprises that meet the standards should be encouraged to enter the chemical industry park (concentration area) for development.