This year is the 80th anniversary of China“s soda ash industry. Since the soda ash industry was started by the industrialist Fan Xudong and the soda ash expert Hou Debang, China“s soda ash producers…
This year is the 80th anniversary of China“s soda ash industry. Since the soda ash industry was started by the industrialist Fan Xudong and the soda ash expert Hou Debang, China“s soda ash producers have developed from the 2 plants of Tianjin Soda Plant and Dagu Chemical Plant in 1949 to 60 plants today. Present production capacity is more than 7 million tons/year and the output in 1996 reached 6.64 million tons, second only to the United States. Annual exports amount to more than 500,000 tons, and China has now become one of the world“s biggest net exporters. According to the requirements set forth in the Ninth Five-Year Development Programme of the Ministry of Chemical Industry, the focus of the soda ash industry will be on structural readjustment, consumption reduction and economic performance improvement. The proportion of heavy soda ash and low-salt heavy soda ash should, say the Chinese authorities, be increased to suit the production of float glass and meet export demand. By the end of the Ninth Five-Year Plan period, the capacity of heavy soda ash will reach 3.2 million tons/year, accounting for 40% of the total soda ash capacity, and the capacity of low-salt heavy soda ash will reach 2.1 million tons/year, accounting for 25%. According to industry experts, the situation for soda ash production and marketing will be severe in 1997. Soda ash output last year greatly exceeded domestic consumption and the increasing inventory will affect the soda ash market this year. Furthermore, restricted by moderately tight financial and monetary policies, firms will still face shortage of capital and difficulty in loan repayment. The increase of soda ash exports by the United States to South-east Asia will also pose a great challenge to the soda ash exports of China in both amount and price, while the price drop in the world market and the reduction and delay of export rebate in China will cause the export price to be lower than the domestic price and therefore dampen the initiative of enterprises in export. Based on these factors, China Soda Ash Industrial Association has proposed a policy package to “control output, increase export, recover sales proceeds, strengthen management and improve economic performance”. The production plan for the whole year is 5.9 million tons, but the output in the first quarter was already 1.79 million tons, a rise of 14%. Based on the production in the first quarter, the output of the whole year will be more than 7 million tons. The excessive production will add to the already severe market. According to the Association, all soda ash producers should therefore base their production on market demand and focus on improvements in economic performance. Exports should be increased, with all soda ash exporters making concerted efforts to ensure overall economic results. The Association also states that the modern enterprise system should be disseminated, and that new efforts should be made in the reorganisation of assets, division of property rights, reduction of staff, improvement of economic performance and redeployment of redundant workers.