Recently, China National Chemicals Import & Export Corporation, ranking among Fortune Global 500 companies for 14 consecutive years, changed its name to Sinochem Corporation. The move marked the first state-owned foreign trade company under the leadership of the State-owned Assets Supervision and Administration Commission (SASAC) to adopt a new name. It was an echo of the trend for foreign trade companies to acquire more resources and development opportunities in both overseas and home market, and accelerate strategic transformation based on market requirement.
Sinochem is one of the national foreign trade companies established immediately after the founding of New China, and has been ranked on top of the list of China’s largest import and export enterprises for many years. It is one of the earliest Chinese companies entering Fortune Global 500 and has enjoyed a sound reputation in international petrochemical industry.
Triggered by factors both inside and outside, Sinochem faced a pressing challenge like many other foreign trade companies operating mainly as import and export agent. To make foreign trade enterprises operating in socialist market economy fundamentally, Sinochem has made great efforts to push forward market-oriented strategy and implement management improvement project. It continued to nurture market-oriented core competitiveness, extend core businesses into downstream and upstream sectors both at home and abroad, and set up three pillar businesses including energy, agricultural inputs and chemicals. Sinochem is striving to transform from a foreign trade agent into a commodity and service provider, and eventually into a comprehensive player in the industries.
Sinochem has come out of difficulties with years of efforts, and overcame three hurdles hindering the development and reform of state-owned enterprise: adjusting internal interest mechanism; centralizing resources, establishing the authority of SOE ownership and clarifying the relationship between SOE owners and managers at various levels; curbing operational foams with regulations to ensure truthfulness of operation.
By extending into upstream and downstream, Sinochem has formed an integrated industrial chain and maintained a leading position in import & export volume.
As one of the 4 national oil companies, Sinochem realizes an annual volume 30 million tons crude oil by import and entrepot trade. It owns the Aoshan Oil Base, the largest in China, consisted of 250,000-ton terminal and 1.58 million cubic meters of oil tanks. It has launched the project to build a national oil strategic reserve of 5 million tons. Sinochem is the largest shareholder of WEPEC, the first joint venture refinery in China. Sinochem is also making efforts to explore overseas oil & gas resources. It has so far acquired such properties in the Middle East and South America, initially forming an integrated petrochemical chain covering exploration, refining, trade, distribution and logistics. While further strengthening the position as the major fertilizer importer and distributor, Sinochem actively participates in the restructuring of national phosphate resources. It has built up a production capacity of 2.5 million tons of phosphate and NPK at home and abroad, making Sinochem the largest fertilizer manufacturer in China. Moreover, Sinochem has established a fertilizer distribution network covering 14 major agricultural provinces. Regarding chemicals business, Sinochem International, a listed subsidiary of Sinochem, is constructing a 20- square-kilometer chemical logistic park in the Yangtze River Delta area and several chemicals R&D bases.
When interviewed by reporters, Mr. Deshu Liu, Preseident & CEO of Sinochem, said that traditional import and export company came into existence during special period of economic development, and it cannot meet the requirement of global competition and social labor division. At present, Sinochem’s operation has exceeded the scope of import & export trade. According to development plan, Sinochem will set up mutually supportive industrial groups and integrated value chains, and become the key booster of national development in our core businesses. The old name was unable to show the current positioning and market value of the company, especially not the future direction of development.
The trademarks of “Zhonghua”(Chinese version of Sinochem), “Sinochem” and the corporate logo have been accredited as China’s Famous Trademark, and the initials of the company, namely “Sinochem”, and the logo will remain unchanged.
According to some experts, the name change of Sinochem implies the profound change in Chinese foreign trade enterprises, which are striving to accelerate strategic transformation and seek more bigger development space.