Due to the aggressive expansion of some fertilizer companies, which launched large-scale projects for ammonium phosphate and compound fertilizer with capacities reaching 300,000, 500,000, and even 1 million tons, the phosphate fertilizer industry faced intense challenges starting from the second half of 2005. A shortage of phosphorite and sulfur, a weak sales market, falling product prices, and costs that were approaching or even exceeding selling prices created a difficult environment. Despite these challenges, Hubei Xiangyun Group managed to achieve 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 improve efficiency, Xiangyun Group required all its subsidiaries to start with small improvements and reduce production expenses. The ammonium phosphate plant focused on lowering ore, acid, ammonia, and coal consumption by optimizing resource allocation, improving conversion and washing rates, and minimizing waste. They also maintained strict control over the P₂O₅ content in finished products, ensuring it stayed between 44.8% and 45.8%, thus reducing nutrient loss. By managing the SO₃ concentration in phosphoric acid and controlling neutralization levels, they significantly reduced acid and ammonia usage, leading to cost savings.
The sulfuric acid plant concentrated on limiting water, electricity, and maintenance costs, while the compound fertilizer plant focused on raw material and energy consumption, improving process efficiency and saving around 500,000 yuan. Zhenyu Chemical Company optimized coal, ammonia, and sulfur recovery, enhancing raw material management and saving nearly 1 million yuan. Other subsidiaries, including the phosphate fertilizer factory, Chuanke Company, and the transport and refining departments, also made significant progress in cutting costs and achieving their energy-saving goals within six months.
In addition, Xiangyun Group improved equipment management by implementing a "double-package" system, standardizing procedures, and increasing equipment availability through better maintenance and record-keeping. This led to higher equipment utilization and better operational performance.
Logistics and administrative costs were also tightly controlled. The company promoted efficient use of resources, such as limiting paper usage and strictly monitoring non-productive expenses, which led to a significant drop in office costs.
Technological upgrades played a key role in the company’s growth. The compound fertilizer capacity reached 200,000 tons, and the ammonium phosphate spray tower transformation was completed. An ammonia waste-gas three-fluid combustion furnace is under construction, and the sulfur trioxide plant has been completed. In fine chemicals, the RESN project, costing nearly 20 million yuan, was completed and started production in January. It is expected to generate substantial income. Other projects, like hydroxytoluene, have also been completed. Additionally, initiatives such as sulfuric acid two-water recycling and ammonium phosphate wastewater recycling are set to be implemented in 2006, further supporting sustainable development.
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