In response to the growing competition from large-scale ammonium phosphate and compound fertilizer projects launched by some fertilizer companies—such as 300,000-ton, 500,000-ton, and even 1-million-ton facilities—phosphate fertilizer companies faced significant challenges starting from the second half of 2005. A shortage of phosphorite and sulfur supply, coupled with a weak sales market and falling product prices, led to sales prices that were close to or even below production costs. Despite these tough conditions, Hubei Xiangyun Group managed to generate sales revenue of 800 million yuan and became the largest chemical company in Eastern Hubei. According to Hu Huawen, the group's chairman, this success was largely due to their focus on details and effective refined management.
To truly cut costs and boost efficiency, Xiangyun Group required all its subsidiaries to start from the ground up, focusing on cost reduction at every stage of production. The ammonium phosphate plant, for instance, concentrated on minimizing ore, acid, ammonia, and coal consumption. By optimizing ore allocation, improving conversion and washing rates, and eliminating leaks and waste, they increased total phosphorus yield. They also strictly controlled the P₂O₅ content in finished ammonium phosphate between 44.8% and 45.8%, reducing nutrient loss. Meanwhile, they monitored SO₃ concentration in phosphoric acid and adjusted neutralization levels to further reduce acid and ammonia usage, which significantly lowered production costs.
The sulfuric acid plant focused on controlling water, electricity, and maintenance costs, limiting fan and air conditioner use to prevent waste. The compound fertilizer plant emphasized raw material and energy consumption, improving on-site management and process optimization, which saved approximately 500,000 yuan in the second half of the year. Zhenyu Chemical Company concentrated on maximizing the recovery of coal, ammonia, and sulfur, while strengthening raw material control. By improving coal rod thermal stability and adjusting ammonia recovery based on production volume, they saved nearly 1 million yuan.
Other subsidiaries, including the phosphate fertilizer factory, Chuanke Company, the transport company, and the refining department, also made efforts to cut down on raw materials, power, coal, and waste, achieving remarkable results and meeting their energy-saving and cost-reduction targets within six months.
In addition, Xiangyun Group improved equipment management by implementing a "double-package" system, standardizing equipment operations, and enhancing maintenance and record-keeping. This initiative ensured better equipment availability and performance compared to the previous year. Logistics management was also tightened, with strict controls on telephone expenses and non-productive spending. Even office staff were encouraged to use paper efficiently, leading to a sharp drop in office expenses.
Technological upgrades were also a key part of the strategy. The group’s compound fertilizer capacity reached 200,000 tons, and the ammonium phosphate spray tower transformation was completed. An ammonia waste-gas three-fluid co-combustion furnace is currently under construction, while the sulfur trioxide plant for sulfuric acid has been completed. In the fine chemicals sector, the new RESN project, invested with nearly 20 million yuan, was completed and started production on January 22 this year. Once fully operational, it will generate substantial revenue. Other projects, such as hydroxytoluene, have also been completed. Additionally, projects like sulfuric acid two-water recycling and ammonium phosphate wastewater recycling are planned for implementation in 2006.
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