On October 25, the 2019 annual Innovation Forum of industrial beauty was held in Shanghai. During the round table discussion on the same day, the guests shared their views on the pain points of the chemical industry, social responsibility and green development.

Mark, executive editor in chief of Caijing magazine, presided over the round table. Guests included Miao Ren, visiting professor of international officials Training Institute of Ministry of Commerce, Xia Fuliang, head of North Asia region of resource efficiency business of Evonik industrial group, Han Gang, deputy chief executive of cedar Holdings Group Co., Ltd., Liu maoshu, vice president and general manager of Honeywell UOP in China, and Sinochem International technology innovation Zuo Gang, assistant general manager of the new center.

The following is a transcript of the speech, with some modifications:

Mark: according to my observation, the chemical industry has two outstanding characteristics. One is the huge size of the industry and its rapid growth in the past. The second is that there is a big gap between the current development and social expectations. For example, when it comes to the chemical industry, people can't help thinking about pollution and accidents. The social image of the industry needs to be improved. This also leads to the theme of today's Forum - "upgrading and transformation of chemical industry under the trend of green manufacturing". I would like to invite you to take two minutes to talk about your observations on the industry.

Mark Miaoren, executive editor in chief of Caijing magazine: I have always paid close attention to the chemical industry. In recent years, with a series of strict policies, the chemical industry has made some important progress and achievements in the reconstruction, transformation and upgrading of the whole industry, which is obvious to the whole society. Following Mr. Mark's question, I put forward my question: what are the main driving forces and potential in the next phase of chemical industry's further upgrading and restructuring? Is it like what some people say that it is at the end of the storm?

Miao Ren Xia Fuliang, visiting professor of the international officials Training Institute of the Ministry of Commerce: just now, Mr. Mark said that maybe the reputation of chemical enterprises in the whole society is not very good, but Guo Weizhong, President of the interface, also said in his opening speech that without chemical enterprises, there can be no booming industry. In fact, our food, clothing, housing and transportation are related to chemical enterprises.

I feel that the safety of chemical enterprises is not the problem of the industry itself, but involves the safety of process, the quality of engineering, the investment in safety and so on. Therefore, I hope to take this opportunity to share with you how Evonik achieves a win-win situation. On the one hand, we need to achieve good economic effect, on the other hand, we also need to achieve safe production and sustainable development.

Xia Fuliang, head of North Asia region of resource efficiency business of Evonik industrial group: speaking of the pain points of the chemical industry, I think there are two recognized points in the industry. As a result of things like the Xiangshui explosion, the society has turned pale when it comes to "talking about change", which is the pain point for the further development of the industry.

Second, there are some unsatisfactory aspects in the chemical industry. China's chemical enterprises are typically scattered, disordered and poor, which need to be integrated and upgraded. In this process, we are faced with some painful reforms, and even some enterprises are eliminated. This is what we urgently need to solve.

Han Gang, vice president of cedar Holdings Group Co., Ltd. Liu maoshu: in fact, Honeywell has a lot of involvement in the chemical industry. I think there are several pain points in the industry, and I think this may also be the opportunity. First, China's chemical industry is facing a transformation from quantity to quality. Second, the emergence of new technologies and processes in the global chemical industry has brought many opportunities as well as challenges. The third is intelligence. The chemical industry needs to think about how to use it as a means to promote the development of the chemical industry in today's intelligent environment.

Liu maoshu, vice president and general manager of Honeywell UOP in China, Zuo Gang: China's chemical enterprises are still in a state of being big but not strong. For domestic enterprises, they still need to invest a lot in R & D, which is a pain point.

On the other hand, security. Singapore, for example, is a small place, but it also has its own refining base. The safety of chemical plant itself is one aspect, while management is another. For many small chemical enterprises in China, the problem lies in management, which also needs to be improved.

Zuo gangmark, assistant general manager of Sinochem International Science and Technology Innovation Center: Xia always comes from Evonik. Can you introduce the development practice of German companies, the industry experience of Germany, and how they solve the safety problems in the chemical industry?

Xia Fuliang: just now president Zuo of Sinochem also said that Singapore is such a small city-state, but it also has its own chemical industry. Safety should be a very important thing for such a city-state. Why should it still do chemical engineering?

I very much agree with Mr. Zuo that the most important thing about safety is actually management. In 2018, Evonik was not only in China, but also in our factories in Korea and Japan. There was no safety accident that caused the loss of working hours.

Mark: how is all this done? Can you sum up this thread succinctly?

Xia Fuliang: let me give a very simple example. If you go to Evonik, you can see that most of the employees hold the handrail when they go up and down the stairs. This small detail reflects Evonik's cultivation of employees' safety awareness. Others may think that this is a very basic thing. However, in Evonik, we need to spend time, energy and even the corresponding funds to cultivate such basic security details.

Another example: one of Evonik's safety related indicators is that no more than one lost time accident can occur per million working hours. How difficult is this requirement? I talked about this with my German colleague who is in charge of safety. He said that this is equivalent to a person's life of 500 years, and there can only be one lost time accident.

So generally speaking, I feel that from the current safety management of the whole chemical industry, especially the special chemical enterprises like Evonik, the chemical industry is actually a very safe industry.

Liu maoshu: I very much agree with President Xia and President Zuo that management and corporate culture are the key and the foundation. But for the chemical industry, another aspect is how to choose the right technology. This technology is not only right today and can make money, it also needs to be sustainable. This technology and future technology should be compatible. I can't say that I choose this technology now, but I can't upgrade it later.

In addition, are all the design concepts scientific? Because many of us even choose the right technology, if there is a problem in the design, it will bring a lot of defects. If we look at many accidents for analysis, most of them are due to design defects, which are not only human errors.

Miao Ren: in fact, I have been in contact with Evonik for about three or four years, and I know more about Sinochem and other enterprises. I think the enterprises that can participate in the round table today are definitely the best ones in China and even in the world in terms of green development. But if we look at the whole industry, it is undeniable that there are still many problems in our industry.

I would like to take the case of Xiangshui chemical industry park first. After the Xiangshui incident, after a series of administrative reforms, the market price of m-phenylenediamine chemical products increased by 50% or more in a very short period of time. What kind of phenomenon is this? Because the chain of the whole chemical industry chain is closely linked, when there is a capacity interruption due to administrative control in each link, the whole industry may appear an extremely unhealthy operation state. Such a state of operation has brought the convenience of speculation to the hot money in the society. If we promote the green development of the industry through a series of traditional administrative means in the next stage, what will happen? This is the first question I want to ask.

Second question: just now a guest talked about how you can achieve safe, green and sustainable development with lean management and good technology. But if I stand in the perspective of a small and medium-sized chemical enterprise, I would like to ask a question: why not eat minced meat? Why don't I do such a thing? Because I don't have money, because I have been exhausted in the process of industrial survival, living in the cracks. I can set no upper limit and no budget for environmental protection investment, but my investment in science and technology must be within the budget. Where does the money come from? How can the future development of the whole industry break the situation from the perspective of industry?

Therefore, the topic we are discussing today is very good, which is how to make a breakthrough in the chemical industry in the context of green manufacturing. If we try to expand the boundary, which industries can pay for "green" in the industrial sector? A common sense is that industries that are closer to end users, such as Tesla, apple, and some Chinese enterprises that manufacture green end products, are willing to let consumers pay for green. So how can the green premium be transmitted from the terminal downstream to the chemical industry? It may have to be further transmitted to the service and enabling solution enterprises in the chemical industry, such as Honeywell UOP?

Zuo Gang: I respond to Professor Miao's story about why not eat minced meat. It should be said that these small chemical enterprises have grown up successfully and done well. In fact, at the beginning, they all attached great importance to safety and environmental protection.

A simple example is Sinochem's tire additive company Sinochem. It was originally a county enterprise in Shandong. Why can it be bigger? Because they attach importance to R & D, safety and environmental protection. So we can achieve the lowest cost, the safest and the best quality in the competition.

Let safety and environmental protection become an internal impulse, not an external pressure on it. Only when enterprises have such inner impulse will they invest in it and solve these problems from the perspective of technology. So once the regulation is down, or when the market demands to a certain extent, this kind of small enterprise will naturally have a chance to survive. At the beginning of spring and summer, all small businesses may be up. Autumn comes and winter begins. At this time, we can see who grows best and who can survive better after this winter.

Xia Fuliang: Evonik is a listed company in Germany. We not only publish the corresponding financial report every year, but also publish the sustainable development report. For Evonik, we will never put sustainable development, environmental protection and safety on the opposite side of achieving good economic benefits. We insist on treating it as two sides of a coin, inseparable from each other.

Just now professor Miao talked about the whole industrial chain. Once an accident happens, it may affect the whole industrial chain, because there will be problems in the supply of raw materials. Therefore, at the end of 2011, Evonik and five multinational chemical enterprises jointly launched the TFs initiative. When purchasing raw materials, intermediate products and even services, member companies will conduct corresponding environmental protection and safety audit on the upstream to see if they attach importance to sustainable development and are qualified suppliers. This is crucial to Evonik's sustainable development.

On the other hand, Evonik's innovation and R & D direction is connected with the social development trend of population growth, aging and resource depletion, which is a very important basis for our enterprise strategy and also allows us to further focus on sustainable development. 94% of Evonik's product sales have done sustainability analysis, and 80% of Evonik's product sales have contributed to the UN sustainable development goals. We are very proud of this, and we are willing to share our management experience in this area. It should be noted that Evonik is not so good at the beginning. We have also experienced a lot of learning process.

Han Gang: I'll go on to talk about Professor Miao's point of view. Professor Miao asked this question: has the chemical industry reached the ceiling?

In fact, the chemical industry can not reach the ceiling. Now 90% of the products of clothing, food, housing and transportation in our life are chemical products, which we may not be aware of in this industry. To be exact, it is not the chemical industry that has reached the ceiling, but for China, the development model that we used to rely on is simple and extensive, relying on scale, low cost and no R & D. In recent years, China has entered the version of Chemical Industry Development 2.0. Only by developing towards green high-end can we survive and develop. The original mode is not enough.

Now the key to the problem is how to implement the green high-end development of China's chemical industry after the chemical industry enters the version 2.0. For example, in terms of environmental protection, the government's requirements are much tighter now. In this context, it is a direction for us to take environmental protection measures for waste treatment. But this is not enough. We should take measures at the source, such as the selection of chemical process route.

The cooperation between cedar and Evonik in a project can illustrate this problem. Propylene oxide is a chemical raw material, mainly used for the production of polyurethane foam. There are many process routes in his production, and most of the traditional production processes in China are very polluting. But propylene oxide is an indispensable raw material. What should we do? In fact, Evonik invented the process of producing propylene oxide with hydrogen peroxide decades ago. This process is very green. It also produces propylene oxide without waste. The promotion of this technology has encountered some difficulties in the past. But after entering 2.0, we will choose a more environmentally friendly route in choosing chemical routes.

So the process of cooperation between cedar and Evonik is actually turning enterprises and industries into green development. On the one hand, to provide a solution for our green high-end development should attract the attention of the national level and social level. We don't want to waste propylene oxide. It's not good, but we need to use a greener route.

Mark: we talked about the important role of technology in the progress of this industry. International cooperation is one way, but in the past two years, there has been a big change in the environment, that is, the trade conflict between China and the United States. Now independent R & D has been raised to a high position. We do not know whether the chemical industry has been affected? Is it to take the road of independent research and development, or continue to adhere to international cooperation?

Han Gang: I think if China's chemical industry wants to develop, it must walk on two legs and work in two ways. It can't only rely on introduction. China is such a big market, we need to have a perfect industrial system. We should attach importance to R & D, but it is too slow to develop only by ourselves. Therefore, if we walk on two legs, we can achieve transformation and upgrading better and faster.

Liu maoshu: in terms of technology research and development, I very much agree that we must have our own technology. In today's Chinese market, many enterprises do not go abroad and are already internationalized, because all enterprises are in China, there are all kinds of enterprises, large and small, and the competition is very fierce. The technological progress of the chemical industry is a long-term process. It can't be said that there will be technology tomorrow if R & D is done today. It's not as simple as making an app, and it takes a long time to accumulate. And its industrial chain is very long, so it can't rely on one enterprise or one institution to solve the problem.

Miao Ren: just now the case of President Xia talked about my heart. The supply chain management of the head enterprise, that is, the green supply chain, is actually an urgent thing for the whole industry. What I didn't expect is that the current chemical industry can also have relatively strict management ability for its upstream.

Mark: as the national team of the chemical industry, can Mr. Zuo please talk about the technologies of the commanding heights and industrial chain hubs that Sinochem focuses on?

Zuo Gang: Sinochem's current technology direction mainly includes three major directions: one is new energy represented by lithium battery; the other is new materials with the theme of lightweight materials for automobiles; the third is biotechnology, green pesticides and chemical fertilizers. These are our three major directions.

Mark: finally, apart from the technology of the chemical industry, an important trend in recent years is the digital transformation of the whole economy. Digital technology is penetrating into all walks of life. Does this wave of technology have an impact on the chemical industry? What is the impact? What do you think of the wave of digital technology?

Xia Fuliang: Evonik has long recognized the strategic significance of promoting digitalization. It will affect all aspects of the company, including organizational structure and business processes, from procurement, R & D to production, sales and marketing. In February 2017, Evonik established Evonik Digital Co., Ltd., which has promoted the company's digital process and cultivated relevant capabilities.

As we all know, China has the world's leading digital infrastructure and culture. Suit measures to local conditions, in China, we are committed to become the leader of the whole Evonik digital group. We focus on using digital tools to improve customer experience in all aspects, and explore new business models based on 1688.com and other e-commerce platforms. Two years ago, Evonik opened our flagship store on Alibaba's 1688 website. Customers can purchase our products online, including coating additives, silica, polyurethane additives, etc. I have also noticed that more and more Chinese companies are turning their purchasing activities to digital, which can ensure speed and transparency.

In general, digitalization has brought great opportunities to Evonik, a special chemical company with a long history.

Liu maoshu: the emergence of new technologies makes it possible to realize interconnected factories. Honeywell UOP launched the concept of "interconnected factory" the year before last. There are three cores: process interconnection, equipment interconnection and personnel interconnection. Through the technology of digital egg laying twins, how can we copy a set of technology in the cloud, and compare it in real time with its actual operation, which can produce a lot of data, compare it, and find out the best operation scheme.

Today, many of our waste and problems come from equipment. How can we connect these equipment. How to use the operation strategy to cope with the change of materials, including the change of the market, these concepts of interconnection are believed to be the most important opportunity for the next round of industrial transformation and upgrading, and may also be a challenge.