diameter 800 mm graphite electrodes

Pubdate: 07-06 2021

“Where there are diameter 800 mm graphite electrodes in the world, there are our products” Fangda Carbon General Manager: The company’s stock price is not high!

This company, which was on the verge of death, has successfully transformed itself. In just more than ten years, it has performed a song of transformation, rebirth, rise, and creation of legends, and it has become the world’s top three carbon companies.

“We hope that after several years of hard work in the future, Fangda Carbon can become a first-class leader in the world’s carbon industry and lead the development trend of the global carbon industry. This is also our dream of future development.” Fangda Carbon, General Manager Party Xijiang said.

diameter 800 mm graphite electrodes

Fangda Carbon’s achievements are indeed brilliant: In 2017, Fangda Carbon produced 178,000 tons of graphite carbon products, of which diameter 800 mm graphite electrodes were 157,000 tons, achieving a total operating income of 8.35 billion yuan, a year-on-year increase of 248.62%; achieving a net profit of 3.62 billion yuan Yuan, a year-on-year increase of 5267.65%. The profit realized in one year is equivalent to the sum of the past 50 years.

How did Fangda Carbon move from the northwestern border to the world stage? What new layouts will the company have besides diameter 800 mm graphite electrodes? The Securities Times “High-quality Development of Listed Companies in Action” interview group walked into Fangda Carbon recently, and a reporter from the Securities Times, Dang Xijiang, general manager of Fangda Carbon, conducted an in-depth interview.

Supply-side reforms drive demand for high-end diameter 800 mm graphite electrodes

Reporter: The company’s main product diameter 800 mm graphite electrodes, can you briefly introduce the company’s product structure?

diameter 800 mm graphite electrodes

Dang Xijiang: Yes. Fangda Carbon currently has three main products in three categories, diameter 800 mm graphite electrodes, blast furnace carbon bricks and new carbon materials. Among them, diameter 800 mm graphite electrodes account for the highest proportion, probably above 90%. The diameter 800 mm graphite electrodes is also the company’s most profitable product in the past two years.

The diameter 800 mm graphite electrodes are consumable materials in the steel smelting process. The diameter 800 mm graphite electrodes are used to conduct electricity and heat during the electric furnace steelmaking process, and finally heat the scrap steel into molten steel, and its mission is completed. The profitability of diameter 800 mm graphite electrodes has been very high in the past two years, mainly due to the continuous deepening of national supply-side structural reforms and the policy dividends brought to enterprises. Last year, the state banned local steel in the adjustment of steel production capacity and replaced it with electric furnace steelmaking.

Reporter: What are the advantages of electric furnace steelmaking? What is the situation of electric furnace steelmaking in my country?

Dang Xijiang: Blast furnace steelmaking needs to consume iron ore, but electric furnace steelmaking only needs scrap steel, and the resources are recycled. With the adjustment of national industrial policies, especially the deepening of supply-side structural reforms, the proportion of domestic electric furnace steelmaking will continue to increase. According to the figures we have, the proportion of domestic electric furnace steelmaking is less than 10%, while that of developed countries has reached more than 40%.

The scrap steel stocks in developed countries are already sufficient for use, forming a virtuous industrial cycle, while the domestic scrap steel stocks are still insufficient. According to the data we have, it is about 200 million tons a year now, and the country’s annual crude steel output will reach 800 million tons, so it has to be supplemented by iron ore resources. However, with the continuous increase in the amount of scrap steel in the future, it will create conditions for the development of electric furnace steelmaking. We judge that domestic electric furnace steelmaking can increase by 30 million tons per year.

Reporter: The national iron and steel industry is undergoing transformation and upgrading, and the production capacity of electric furnace steel continues to increase, which has brought Fangda Carbon a broad market.

Dang Xijiang: EAF steelmaking is clean and environmentally friendly, which is the development trend of the industry. The increasing demand for diameter 800 mm graphite electrodes in electric furnace steelmaking also brings good opportunities for our development. my country’s electric furnace steelmaking is upgrading to 90 tons or more than 100 tons, and small electric furnaces will inevitably be eliminated. Large-scale electric furnaces require large-size diameter 800 mm graphite electrodes, and large-size ultra-high power diameter 800 mm graphite electrodes can only be produced by large companies such as Fangda Carbon. With the gradual elimination of small carbon companies, Fangda Carbon will provide development opportunities.

We judge that the market prospects of diameter 800 mm graphite electrodes in the future are stable and positive. In the next three years, electric furnace steelmaking can maintain an increase of 30 million tons, and it will enter a stable period when it reaches 90 million tons in three years. In three years, the demand for diameter 800 mm graphite electrodes will increase by 200,000 tons. At this time, the proportion of electric furnace steelmaking may reach about 20%.

Reporter: The company’s semi-annual report shows that in the first half of this year, your company’s performance has declined. Can you tell us why?

Dang Xijiang: The price of diameter 800 mm graphite electrodes has fluctuated recently. The figures for the quarter-on-quarter performance are indeed not very attractive, but they have increased year-on-year, and the figures are still very beautiful. The price fluctuations of diameter 800 mm graphite electrodes are phased. We predict that in the future, large-size ultra-high-power products will maintain price stability, while prices of small-size low-end products will fluctuate. With the strict implementation of the national environmental protection policy, the production of smaller carbon companies will be affected.

Reporter: Where is the competitiveness of China’s diameter 800 mm graphite electrodes in the international market? Do you think the company’s stock price now fully demonstrates the company’s due value?

Dang Xijiang: Before 2015, domestic products used price to hit the market. After entering March 2017, it was basically the diameter 800 mm graphite electrode manufacturer that was setting the price of diameter 800 mm graphite electrodes, which changed the previous purchaser’s pricing. situation. The international competitiveness is mainly reflected in the advantages of scale and quality level. In addition, our quality and output are high, and our customers are large steelmaking companies and strategic partners.

Frankly speaking, I think that the company’s current stock price cannot keep up with our current performance and development. Compared with our future market capacity, I think the company’s stock price is not high. Last year we made a relatively good profit. Basically all of the money we made was given to shareholders. We distributed 19 yuan for every 10 shares, which is more than 3 billion yuan. diameter 800 mm graphite electrodes.

Environmental protection advantage is also core competitiveness

Reporter: After the implementation of strict environmental protection policies, a large number of small carbon plants that do not meet environmental protection standards will be closed. This is also a new opportunity for the company?

Dang Xijiang: The strict implementation of the national environmental protection policy will impact smaller carbon companies that do not meet environmental protection standards. The backward production capacity in the industry will also take the opportunity to be eliminated. Recently, China Carbon Industry Association commissioned Fangda Carbon to take the lead in formulating the “Carbon Industry Air Pollutant Emission Standard.” At present, the first draft of the new emission standard has been submitted to the China Carbon Industry Association for review. The new emission standards are formulated with reference to the most stringent emission standards of Beijing-Tianjin-Hebei and surrounding “2+26 cities”.

We predict that after the implementation of the new standard in the future, small carbon companies will face new challenges. Substandard production capacity will be eliminated. There may be a shortage of supply of diameter 800 mm graphite electrodes. This will lead to an increase in the market price of diameter 800 mm graphite electrodes and the company’s profitability. Will be further enhanced.

Reporter: Can you talk to us about the company’s investment in environmental protection?

Dang Xijiang: Fangda Carbon has been willing to invest in environmental protection for many years. In 2018, it invested 129 million in the transformation of environmental protection equipment, including dust emissions, noise emissions, sewage emissions, and flue gas emissions that have all reached the standards. Now the company is in line with the new standards, reaching the same level as Europe and the United States.

In terms of sewage treatment, the company requires the water discharged after sewage treatment to meet drinking water standards. By the end of this year, the company will implement zero discharge of sewage, realize full internal recycling, and basically no longer take water from outside.

In terms of energy, each ton of diameter 800 mm graphite electrodes needs to consume about 5,500 kilowatt-hours of electricity, which is about 200 cubic meters of natural gas. The plant consumes 100,000 cubic meters of natural gas every day. Although the price of natural gas is twice that of gas, Fangda Carbon insists on using it. Therefore, in terms of environmental protection, Fangda is a participant in the formulation of environmental protection standards for the carbon industry, as well as an industry leader, and must lead the carbon industry to achieve low emissions.

In addition, the company is still building a garden-style factory. This year, it invested about 15 million yuan. The current factory area is very beautiful.

Recreate a Fangda Carbon

Reporter: The company has been at the forefront of the industry in the production of diameter 800 mm graphite electrodes. According to the plan, the company will cooperate with Baowu Group to further increase the graphite production capacity. Can you introduce the plan in this regard?

Dang Xijiang: Fangda Carbon is cooperating with Baowu Group and plans to build another Fangda Carbon. We will cooperate in the establishment of a 100,000-ton ultra-high-power diameter 800 mm graphite electrodes production line in the Red Valley area. The equipment and configuration of this new enterprise are world-class, and the degree of automation is very high. We initially plan to invest 2.7 billion yuan. Baowu Group will invest 51% and Fangda Carbon will invest 49%. The new plant is expected to be put into operation in June 2020.

At present, Baowu Group’s annual consumption of diameter 800 mm graphite electrodes is about 10,000 tons. With the adjustment of its product structure, the demand for diameter 800 mm graphite electrodes will increase, but it will not exceed 15,000 tons. Some will be marketed and most will be exported.

Reporter: In addition to the production of diameter 800 mm graphite electrodes, does the company plan to extend to the upstream and downstream industries of diameter 800 mm graphite electrodes?

Dang Xijiang: We have ideas in this regard, but our goal at this stage is to make the diameter 800 mm graphite electrodes more refined and better, and to adjust the product structure, for the development of the steel industry in accordance with the adjustment of the national industrial policy and the requirements for high-quality steel development. Fulfill its responsibilities. However, in the future, the company will develop around three categories of diameter 800 mm graphite electrodes, blast furnace carbon bricks, and new carbon materials.

In terms of new carbon materials, the company will lay out the production of carbon products for nuclear power. At present, China’s nuclear power accounts for only about 4% of the total domestic power generation, which is far from the world average of 10%, and there is a lot of room for improvement in the future. It is estimated that a 600,000 kilowatt nuclear power plant will bring an output value of 1 billion yuan.

In the past, the carbon components of reactors were mainly imported from Japan, and China did not have this technical capability. Through the research and development of Fangda Carbon, and achieved technological breakthroughs. More importantly, at present, only Fangda Carbon has obtained the license for the manufacture of nuclear graphite and carbon reactor internals. It has qualifications, technology, products, and a market, which can not only improve corporate efficiency, but also develop new energy industries for the country. Make a positive contribution.

Reporter: Can you introduce the company’s research and development capabilities?

Dangxijiang: Fangda Carbon Factory is located in the border of Lanzhou, with a relatively poor geographical location, and it is difficult to attract high-end talents and work for a long time. Our approach is to establish a joint research and development mechanism with domestic institutions of higher learning and scientific research institutions. We and the Nuclear Research Institute of Tsinghua University jointly established the Fangda Carbon Nuclear Materials Research Institute. The cutting-edge technical guidance of the university is combined with Fangda’s carbon production process.

At present, the company has established cooperative relationships with universities and scientific research institutions that are at the forefront of carbon material research and development in China, such as Shanghai Institute of Applied Physics, Shanxi Institute of Coal Chemistry, Lanzhou University of Technology. Fangda Carbon also has a post-doctoral workstation to introduce technical personnel in the field of carbon materials to the workstation. They can first formulate a plan in the institute, and then practice on the production site, combining the production process to promote our research and development work. Fangda Carbon’s carbon material research institute and R&D base have been moved to Chengdu, and high-end talents can settle in Chengdu to specialize in new materials and new technologies. At present, our recruitment requirements are that operating workers must be graduates of vocational schools; researchers must be graduate students with a master’s degree or above.

Go abroad and lay out overseas

Reporter: Fangda Carbon’s diameter 800 mm graphite electrodes have a good reputation overseas, and there are also a group of strategic customers. Please talk about the company’s future development ideas in overseas markets.

Dang Xijiang: Fangda Carbon mainly exports ultra-high-power high-end products, and we basically achieve full coverage of the global market. Wherever diameter 800 mm graphite electrodes are useful in the world, there are Fangda Carbon products. Fangda Carbon’s export volume accounts for 40% of our total output. We have maintained the No. 1 position in Gansu Province in earning foreign exchange through exports for six consecutive years.

Fangda Carbon’s current achievements are mainly due to the vitality of the enterprise after the restructuring. Let me cite a set of figures to illustrate the problem. Before the restructuring, the company had 7,000 employees and produced 30,000 tons of products a year; after the restructuring in 2000, the number of employees has been reduced to 2,300, and the Lanzhou headquarters produced 120,000 tons of products a year.

Reporter: We have seen that Fangda Carbon has undergone radical changes after the restructuring. Can you specifically talk about the company’s competitive advantages after the restructuring?

Dang Xijiang: The advantages are mainly reflected in five aspects. The first is the equipment advantage. Fangda Carbon has introduced a large number of European, American and Japanese production and processing equipment, especially the 40MN vertical stamping hydraulic press imported from Japan, DC graphitization furnace, and the largest domestic ring roasting furnace, all of which belong to the world’s advanced level of diameter 800 mm graphite electrodes production equipment.

The second is the advantage of capacity scale. Haishi in Lanzhou

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