China Pingmei Shenma Group, whose capacity reduction task accounts for nearly 20% of Henan Province, has seized the opportunity of transformation and upgrading in resolving excess coal capacity, adjusted its structure, and lengthened its chain, which not only cultivated new development momentum and enhanced the vitality of the enterprise, but also provided space for the resettlement of employees.

Starting early and resolutely reducing capacity

"Capacity can be reduced, employees can be resettled, and the enterprise can get out of trouble"--As a large state-owned enterprise with a mining history of more than 60 years, facing the severe market situation, Liang Tieshan, chairman of China Pingmei Shenma Group, said: "Resolving excess capacity is a good opportunity for us to get rid of difficulties and transform and develop."

The group began to actively eliminate backward coal production capacity in 2010. By the end of 2015, it had closed 90 pairs of resource-depleted and inefficient coal mines. Since last year, the group has permanently closed a number of coal mines with poor endogenous conditions, no hope of turning losses into profits in the short term after suspension of production, and large subsequent investments, involving nearly 25,000 employees.

Chen Jinwei, director of the group's corporate reform management department, said: "After the number of coal mines decreased, the concentration and productivity of the coal industry have been improved, and advantageous resources have gathered in the retained mines, which is not only conducive to the safe and efficient production of coal mines, but also reduces the pressure of losses and gets rid of the burden of development."

Of the 14 pairs of mines closed in 2016, the monthly management and operation expenses of 6 pairs of reorganized mines totaled 2.1 million yuan. Now this fee has been gradually reduced to zero. After the closure of 8 pairs of main mines, the annual loss has been reduced by tens of millions of yuan.

Adjusting the structure to promote transformation, lengthening the chain and cultivating momentum

In recent years, China Pingmei Shenma Group has closely combined de-capacity with promoting reform and adjusting the structure, insisting on being based on coal, extending coal, and surpassing coal, and persistently optimizing the industrial structure. It has achieved extraordinary results in multiple industrial sectors: coke, industrial yarn, cord fabric, and saccharin sodium are all the world's largest in production capacity; nylon 66 salt and engineering plastics are the largest in Asia in production capacity; electroplated diamond wire is the largest in China in production capacity.

"The coal industry is doing subtraction, the chemical industry is doing addition, and the emerging industries are doing multiplication." As the downward pressure on the coal market continues to increase, the group focuses on cultivating emerging industries such as nylon chemicals, coal-salt chemicals, and new energy and new materials in the downstream industries of coal, and has invested more than 20 billion yuan to launch a number of major structural adjustment projects at low cost against the trend. At present, the nylon industry and the new materials industry have reached the international leading level.

In May 2012, the group cooperated with universities to develop high-purity silane products based on the coal-coke circular economy chain and using high-purity hydrogen, electricity, steam and other resources such as coking by-products. The 600-ton silane gas production line of the first phase project was successfully put into production, ending the history of foreign technology monopoly and China's products relying entirely on imports. In the next step, the group will also invest 5 billion yuan to build high-purity silane gas, electronic-grade polysilicon and zone-melting-grade polysilicon projects.

In April last year, the group cooperated with Xi'an Longji Company to establish New Energy Technology Co., Ltd., planning to build the world's largest and most advanced 4GW high-efficiency monocrystalline silicon battery project. The first phase of the project has been put into production.

Yang Jianguo, general manager of China Pingmei Shenma Group, said that as the industrial chain lengthens, strategic emerging industries have begun to take shape. Now, of the group's annual operating income of 150 billion yuan, non-coal industries account for 120 billion yuan.

Non-coal feeds back to coal, and the diversion and resettlement of employees is stable and orderly

In order to actively promote the diversion and resettlement of employees, the group has opened up 11 channels such as internal retirement, labor export, public welfare job support, and job transfer. A number of new projects launched by the company during the structural adjustment also provide space for the diversion and resettlement of employees.

After the closure of Dazhuang Coal Mine, Guo Baitang, the former secretary of the Party Committee of Dazhuang Mine, was transferred to the chairman of Pingmei Longji Company. The new enterprise has a good market and strong stamina. After all the projects are implemented, 3,500 employees can be resettled. Guo Baitang said: "At that time, not only can all the employees of the original Dazhuang Mine be resettled, but we will also have to recruit more people!"

According to the group's deployment, the Cord Fabric Development Company, which has firmly ranked second in the world in the market share of nylon 66 industrial yarn and cord fabric, must resettle 330 employees who have transferred from coal mines every year within three years. Party Secretary Zhao Tiejun said: "Not only can we ensure the completion of the task, but if the new project we are planning is successful, we can also resettle 500 more people."

Sun Peiyang, a technician of the comprehensive mining team of the former Liyuan Coal Mine, was trained and diverted to the Nylon Technology Company under the group after the closure of the coal mine. After a year of experience, he is now the main control operator. He said: "The original coal mine had poor efficiency and low income. The new enterprise has a promising market prospect. I now earn more than 4,000 yuan a month, which is much higher than in the coal mine!"

As of the end of 2016, all 24,997 employees involved in the resolution of excess production capacity of China Pingmei Shenma Group have been resettled, realizing the orderly transfer of human resources.

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