APC and RTO Experiencing Increased Use in China

Summary

Sinopec, a leading integrated oil and chemical company in China, introduced advanced process control (APC) and real-time (online) optimization (RTO) applications in the country in the early 1990s. Working with Setpoint (acquired by AspenTech in 1996), Sinopec pioneered China’s first APC/RTO pilot project in a catalytic cracking unit.  The results were encouraging, with significant economic returns.

This pilot project helped Sinopec begin to understand the potential value that APC and RTO solutions could provide and the company initiated additional pilots for these types of solutions in a variety of different units in other plants.  Working largely with strategic partners, Honeywell and AspenTech, Sinopec implemented hundreds of APC and RTO projects in the years that immediately followed.

Based on Sinopec’s initial success, from about 1996 through 2004, other process industries in China began to implement these types of advanced technologies, resulting in a number of large-scale APC and RTO implementations. But this changed abruptly starting around 2005, when process industry end users in China began to question whether these solutions were actually meeting their expectations.

Sinopec, for example, performed an internal survey that showed that only about one-third of its installed APC and RTO solutions were performing well, one-third were barely satisfactory, and the final one-third were either performing poorly or had been abandoned.  Reasons included lack of adequate attention from management, poor implementation quality, lack of adequate maintenance, lack of enough valid field data, not enough qualified technical resources, etc.

User Demand on the Rise Once Again

Recent ARC research indicates that, following a decade-long slowdown in China’s APC and RTO market, year-over-year market growth suggests that the second wave of APC and RTO implementations in China has begun.

China’s two largest users, Sinopec and CNPC, have demonstrated clearer and more positive planning for making targeted investments in these types of advanced solutions.  Furthermore, due to increasing adoption by other bulk chemical plants and China’s smaller “teapot” refineries, the APC/RTO market appears to be entering another era of rapid growth.

Several factors should help drive increasing acceptance of APC and RTO solutions within China’s process industries:

• China’s government is encouraging domestic manufacturers to implement smart manufacturing projects. As a subset of smart manufacturing, APC and RTO solutions are being included within many smart manufacturing projects, including both government-funded projects and projects initiated and funded by process manufacturers themselves.
• Due to current overcapacities in China, we’ll see fewer greenfield projects.  Process manufacturers will invest more to update and optimize their APC and RTO solutions, which can add significant value here.
• Based on lessons learned in the past, China’s process manufacturers have developed a much better understanding of how to apply and, equally important, maintain APC and RTO solutions.
• As we enter the era of Big Data and smart manufacturing, more and higher quality field data will be available to feed APC and RTO applications, helping ensure successful implementations.  In the past, China’s process plants frequently faced a shortage of valid, real-time data and found it difficult to ensure the accuracy of soft sensors. 

Key End User Industries

Today, refining and petrochemicals, power generation, chemical, mining & metal, pulp & paper, and cement are among the largest end user industries for APC and RTO solutions.  Among these, refineries and petrochemical plants, mainly driven by Sinopec and CNPC (the world’s second and fourth largest oil refining companies, respectively), are far and away the leading users; although we’re starting to see some teapot refiners adopt APC solutions in some main production units.

Thermal power generation, metals & mining are two traditional industries for APC and RTO solutions, mainly applied to help reduce energy and raw materials consumption and reduce emissions.

Chemical, already a large user, is another main industry for APC and RTO solutions, and this segment has the potential for rapid growth.

In the past, cement was not a main served industry for APC and RTO solutions, but this is changing.  Similar to the power generation or metals & mining industries, the objective in this industry is to reduce energy, raw materials consumption, and emissions.

Today, dozens of suppliers have a presence in China’s APC and RTO market.  These include global suppliers like ABB, AspenTech, Emerson/Ovation, Honeywell, Rockwell Automation/Pavilion, Schneider Electric, and Siemens.  Domestic suppliers such as Supcon, HeroopSys, and HollySys also have a presence, with other local suppliers entering this market in recent years.

Mid-size Chemical Companies Discovering the Value of APC and RTO

In the past, chemical manufacturers were not large end users of APC and RTO solutions, despite the potential benefits for many processes.  But this is changing, with more and more large and even privately owned mid-sized chemical manufacturers making (or considering) investments.   ARC sees considerable potential in China’s established coal-to-chemicals sub-sector, where APC and RTO solutions can help maintain stable operations.

Today, China is the biggest chemical manufacturing center globally, according to data from CCEMA, equal to the total capacity of the US, Germany, Japan, and Korea, and roughly one-third of the total global capacity.

Local Suppliers Seeing Increasing Acceptance

Besides the main global APC and RTO suppliers, domestic suppliers are playing an increasingly important role in China.

Supcon software is a leading supplier, similar to the company’s position in the DCS market. Having targeted the refining, petrochemical, and chemical industries, it is an approved APC/RTO vendor for Sinopec, along with AspenTech and Honeywell.

HeroopSys, a strong APC/RTO supplier for boiler control and furnace optimization for the metal and power cogeneration industries, recently also entered the chemical industry.

Other local suppliers in China (HollySys, Techfly, Infitech, etc.) target specific industries.  Infitech, for example, targets thermal power generation, with an installed base of more than 150 plants.

Several local system integrators in China also serve this market in an implementation and support capacity.  Among these, PCITC (a joint venture between Sinopec and PCCW) is the largest. PCITC cooperates closely with AspenTech, Honeywell, and Supcon, with a dedicated team providing engineering and maintenance services for all Sinopec APC/RTO installations, which currently number over 200.

Richfit, a subsidiary of CNPC, handles most of that company’s IT projects, including APC and RTO applications.

Recommendations

APC and RTO solutions have proven to be effective tools to help process manufacturers increase production efficiency, product quality, and safety, while reducing energy, raw material consumption, and emissions.  For these reasons, ARC believes we will see increasing acceptance among end users in China, particularly as manufacturers accumulate more expertise in this area.

Process manufacturers in China interested in implementing these types of solutions should consider the following:

• Management support is critical for success as is aligning APC/RTO projects with specific business objectives such as improved product quality, increased yields, etc.
• Create a multi-disciplinary team, including control engineers, process engineers, IT, and operations.
• APC and RTO solutions require continuous maintenance to sustain benefits over the long term as raw materials, processes, products, and business objectives evolve over time.  This is often more challenging than the initial implementation.  

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Keywords: Advanced Process Control, Online Optimization, China, Process Industries, ARC Advisory Group.