Local Report: Benefits Brought by CDM Fund

As efficiency is crucial to enterprises, Hongguang Medical Packing Company of Ruicheng County decided to upgrade the two-step method to electric melting furnace. Meanwhile, Hongguang also realized the environmental pollution caused by emission in water gas production, which was another reason for adopting the environmentally friendly electric melting furnace. However, at first, low carbon cycle development and the benefits therewith weren’t fully recognized by the company including Zhang Huaimin himself, President and General Manager.

 

From flame furnace to electric melting furnace did not only mean change of combustion mode but also required complete replacement of materials. At that time, a great opportunity was on its way to help Hongguang bring the transformation to success.

 

In 2010, Ministry of Finance and relevant ministries jointly issued China CDM Fund Management Rules as a funding mechanism specialized to support energy conservation and emission reduction as well as low carbon development at the national level. Since Shanxi Province is one of the energy and heavy chemical industry bases in the country with the extremely distinct feature of resource-based economy and thus is facing huge challenge of saving energy and cutting emission, after the Rules was announced, the financial sector of Shanxi Province soon made supportive policies after taking the actual situation of the province into consideration. One of the main purposes was to promote cycle development of traditional industries and to realize low carbon development of high carbon industries. afterwards, it started collecting projects across the province.

 

The Hongguang electric melting furnace (all-electric melting furnace) technology belonged to the category of energy efficient and environmentally friendly glass (all-electric melting) furnace of light industry in the encouraged category of the revised Industrial Restructuring Guidance Catalogue (2011). As it fully met the conditions of clean fund, Hongguang electric melting furnace project was recommend by the financial sectors at the city and provincial levels to China Clean Development Mechanism Fund of Ministry of Finance (thereafter referred to as CDM Fund).

After strict selection, CDM Fund provided 50 million RMB in the form of entrusted loans to Hongguang in 2012. “The fund has greatly boosted our confidence to accelerate the development of electric melting furnace and also has led us to a new journey toward zero emission. This is the social responsibility we must shoulder and it is a revolution in traditional production,” said Zhang Huaimin movingly.

 

In less than one year, Hongguang successfully developed and installed the world-leading pharmaceutical glass tube manufacturing facility—electric melting furnace. In September 2012, the first electric melting furnace test production line began commissioning and Hongguang ranked among the first ones to upgrade flame furnace to electric melting furnace in the industry.

Electric furnace conducts electricity into glass through electrodes and uses the Joule heating effect of glass lonomer under high temperature to heat and found glass. Since the electric furnace batch can cover the entire liquid level of the melting tank, the temperature within the melting tank won’t be too high, thus realizing cold heading and greatly reducing heat waste. Electric furnace directly utilizes glass metal as the electric conductor of Joule heating effect and therefore has a much higher thermal efficiency, which is over 80%, than heating furnace. Meanwhile, the coating batch can prevent the volatile matter of glass components from escaping, reduce volatilization loss and ensure the stability of glass composition. As tested by Beijing Institute for Drug Control, the product quality achieves the physical and chemical property of neutral borosilicate pharmaceutical glass and reaches the double A standards for pharmaceutical packaging material by China Food and Drug Administration. The products can replace similar imported ones with two thirds price less. Besides, in contrast with the two-step method of the water gas process, to produce 10,000 tons of level-A water resistance pharmaceutical tubes, the electric furnace technology can reduce comprehensive energy consumption by 20,317 tons of standard coal and reduce carbon dioxide by 53,400 tons. Its energy consumption is 3,342 tons of standard coal less than the admittance quota of the electric furnace industry and still 2,042 tons of standard coal less than the advanced quota.

 

At the end of 2014, the first electric furnace of Hongguang Medical started production. The products had small external diameter tolerance, uniform thickness, small bending degrees, high permeability, good processing property and electric performance, fully meeting the national standards of physical and chemical property. Hongguang Medical also successfully developed the advanced low-borosilicate level-A water resistance glass tube, which was highly valued by China Association of Pharmaceutical Tubes and helped Hongguang become one of the leading companies in low-borosilicate pharmaceutical tube production in China. “Rome is not built in one day. All that matters is whether we have the courage and endeavor or not…and we must dare have great ambition and be confident to realize it,” said Yuan Chunqing, Secretary of Party Committee of Shanxi Province, during his visit to Hongguang Medical. Knowing that Hongguang received support from the CDM fund and had made great transformation through low carbon development, he was very impressed and said: “officials and cadres at all levels should take the lead in making innovation and winning competition and help build Hongguang into a platform with a solid foundation and a view to market extension.”

 

On January 24, Shanxi Development and Reform Commission and Shanxi Office of Transformation and Comprehensive Reform jointly announced the 50,000 tons annual capacity production line project of level-A water resistance pharmaceutical tubes of Hongguang Medical Packing Company of Ruicheng County as Major Project of Shanxi Transformation and Comprehensive Reform.

 

On May 18, 2014, the scientific and technological achievement evaluation of the electric furnace technology of Hongguang by experts organized by Shanxi Science and Technology Department showed that the innovation reached the leading level among similar applied researches of the same field in China. In addition, Hongguang also developed all-electric borosilicate glass furnace, molybdenum electrode waterproof jacket of glass electric furnace, automatic charging equipment of electric furnace, Dana machine blowing assembly, kiln wall fabric of the all-electric borosilicate glass furnace and four other national patent technology.

In 2013, Hongguang put another 3 electric furnaces into production and still could not meet the demand.

 

In 2013, Hongguang was granted 4 registered certificates and 12 letters patent concerning low borosilicate tube, medium borosilicate tube, low borosilicate ampoule, medium borosilicate ampoule and all injections, setting a new record. The sales revenue for the year amounted to 0.2 billion RMB, with 20 million RMB net profits and 20.16 million RMB taxes, 15.68 million RMB of which was turned in. The revenue of 2013 was 16 times that of 2012.

 

As the clean development of Hongguang attracted attention and support from the leaders at city and provincial levels, the development of the enterprise in turn was power by strong engine. Dong Xuguang, Secretary of Party Committee of Ruicheng County, gave useful instructions and inspired Hongguang people with his practical attitude and wisdom. Jia Guoping, County Magistrate, worked late into midnight at Hongguang Company more than once and helped solve production problems, such as dual power supply, land for future extension and development financing, all in a timely manner. Relying on its own, Hongguang has become a leading company of the industry, and under the support of governments and leaders at all levels, it now has the courage and confidence to build a world-class pharmaceutical tube enterprise in Asia and the world.

 

In China, the pharmaceutical glass industry has a rather late start. As Hongguang is rising and continues making innovation, our pharmaceutical glass industry has gradually mastered the core technology and proprietary intellectual property rights, and our products are comparable to advanced foreign products. Besides, down-stream product manufacturers of ampoules, tube-type bottles and penicillin bottles now can stop relying on imported tubes and greatly improve economic benefits thanks to the good cost performance of Hongguang tubes.

 

Fully prepared in all production and operation elements such as market, technology, quality, talents and fund, Hongguang has launched the project of glass tube industrial park with a total investment of 1.09 billion RMB, covering an area of 415 mu, integrating the development and production of pharmaceutical tubes and the processing of tube-type product and ampoules. The vision is to build the country’s largest world-class pharmaceutical glass production base. Once completed, the total production capacity can reach 160,000 to 200,000 tons. It can save 100,000 tons of standard coal annually and reduce sulfur dioxide emission by around 300,000 tons. The sales revenue is expected to reach 1 to 1.5 billion RMB with 0.1 billion RMB taxes turned in and 1000 new job opportunities. The project officially started from March 26, 2014 and is expected to finish the main construction by the end of October. Hopefully, two electric furnace production lines can be completed and put into trial operation by the end of 2014.

 

 “Our project is divided into three phases. The main construction covers 100 mu, including combined workshops and finished products warehouses. Besides, the raw material warehouse covers 10,000 square meters. There will be 12 electric furnace production lines and 30,000 square meters tube-type bottle workshop, as well as ancillary facilities supplying water and power. We will attract competitive tube processing enterprises with good reputation to join in the park. We are confident and ready to build this glass tube industrial park into the No. 1 pharmaceutical glass production base in Asia and contribute to promoting national industry,” said Zhuang Huaimin about the industrial park under construction.

 

Fire, passed on from generation to generation as it is, has been replaced by the cleaner and more efficient electricity. The electric furnace technology not only serves the fundamental policy of the country to address climate change and save energy as well as reduce emission, but also meets the strategic objectives of the local government to achieve ecologically friendly development. The future development of Hongguang will go alongside with high-technology and clean production.

 

Source: http://www.cfen.com.cn