Utilize provincial funds and technology to develop Shanxi's competitive local industry
Shanxi Tianhao Chemical Co., Ltd. recently broke ground on the first phase of a 300,000-ton methanol production project funded by Shandong Yankuang Group. This marks another instance of Shanxi’s coal chemical enterprises leveraging external resources—often referred to as "borrowing the东风 (east wind)"—to drive growth. Previously, major players like Shanxi Lanhua Coal Industry Group and Jincheng Anthracite Mining Group have partnered with well-known chemical companies from other provinces, bringing in capital, technology, and expertise for joint ventures.
According to reports, many Shanxi-based companies are actively seeking investment, technological upgrades, and talent through these strategic collaborations. For example, Shandong Yankuang Group has invested 4.2 billion yuan in Xiaoyi City, Shanxi, aiming to produce 300,000 tons of methanol annually along with 900,000 tons of coal. Other projects include investments by Shandong Luneng Group in Shanxi, highlighting the growing trend of cross-provincial cooperation in the coal chemical sector.
Shanxi Lanhua Coal Industry Group, a large integrated enterprise covering coal, chemicals, and pharmaceuticals, ranks among the top 34 enterprises in Shanxi. With total assets of 2.5 billion yuan, the group has focused on transitioning from traditional coal to high-tech coal chemistry. Recently, it signed a partnership with Shandong Jiutai Chemical, which holds proprietary technology for dimethyl ether. Together, they plan to build a facility producing 1.5 million tons of methanol and 1 million tons of dimethyl ether annually, converting 2.5 million tons of coal each year and generating over 1 billion yuan in profit.
Jincheng Anthracite Mining Group has also gained attention by forming alliances with several Shandong-based chemical companies. As one of China's top 520 enterprises and a key player in Shanxi, the group is developing a comprehensive strategy that includes coal, gas, power, and chemical industries. This year, it partnered with Shandong Mingshui Chemical, introducing their technology and establishing Shandong Mingshui Dahua Group. The group later acquired a 38% stake in Shandong Union Chemicals, becoming its largest shareholder. Additionally, Jincheng joined forces with Shandong Luneng and Shanxi Hexin Electric Power to develop the Jindongnan Coal and Electricity Base, featuring 40 million tons of annual coal output, power stations, and methanol and fertilizer projects.
Shanxi enterprises are increasingly focusing on utilizing local resources such as coke oven gas, low-quality coal, and coalbed methane to expand the methanol industry and promote deep processing. At the recent Shanxi Investment and Trade Fair, Acting Governor Yu Youjun emphasized the province’s advantages in coal chemicals, coalbed methane, and coke oven gas, promising preferential policies for investors in high-tech sectors like fine chemicals and synthetic oil.
Local entrepreneurs from Shandong highlighted Shanxi’s rich coal reserves, abundant energy, and cost-effective labor force, further boosting interest in the region. During the “11th Five-Year Plan,†Shanxi plans to invest 24.1 billion yuan in methanol and deep processing, expecting an additional 7.64 million tons of annual production, 19.2 billion yuan in sales revenue, and 6.3 billion yuan in profits and taxes. Of this, 9.6 billion yuan will come from “Dongfengâ€-introduced investments, adding 3.05 million tons of methanol capacity and 7.9 billion yuan in sales, with 2.52 billion yuan in profit and tax.
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