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I. Company Profile
——A Platform Connecting China and the World
（1） Company Overview
With customers from more than 100 countries and regions worldwide, SINOCHEM International Corporation (“SINOCHEM Intl”) is a large state-owned listed company engaged in logistics, industrial investment, trading and other operations in chemical logistics, rubber, chemicals, petrochemical, metallurgy and energy, etc. (share code:600500). In 2006, the total sales revenue of the major operations of SINOCHEM International reached RMB 16 billion and its total assets over RMB 7.9 billion。
The controlling shareholder of SINOCHEM Intl, SINOCHEM CORPORATION (SINOCHEM) (formerly known as China National Chemicals Import & Export Co) was founded in 1950. As a key state-owned enterprise under the direct control of State-owned Assets Supervision and Administration Commission of the State Council, it is the earliest Chinese company to rank among Fortune 500 and has remained on the list for 16 times consecutively. As one of the four state oil giants, SINOCHEM operates globally in petroleum, fertilizer, chemicals, finance and real estate business。
The development objective of SINOCHEM International is to extend the business upward and downward from the core and to the domestic and overseas markets by focusing on core business, strengthening the capacity of core business on the organization of resources and market development, creating new value for shareholders, customers, and employees, and developing into a comprehensive group with a strong international competitive edge and global influence.
Since being listed in the Shanghai Stock Exchange in 2000, SINOCHEM Intl has been repaying shareholders and society with the outstanding performance of 30% net profit compound growth rate and been recognized as one of China’s Top 100 listed companies by Fortune for 7 consecutive years. It ranks first among the “100 Best Managed Chinese Listed Companies” by the Institute of World Economy & Politics, the Chinese Academy of Social Sciences, and also tops “China’s Best Board of Directors” by Directors & Boards magazine and Chinadirectors.com. The company’s stock has been selected as constituent stock for both the Shanghai Stock Exchange 180 index and Shenzhen 300 index.
SINOCHEM Intl integrates its daily business practice, operation and policies with fundamental social values, pays attention to the vulnerable, focuses on environmental protection and commits itself to building a resource-saving and environmentally friendly society.
（2）Brand Value
”SINOCHEM”（SINOCHEM） brand is a well-known trademark in China and enjoys a good reputation globally in the industry. In 2004, SINOCHEM, valued at RMB57.689 billion, ranked fifth among “Top 500 Most Valued Brands” jointly selected by the World Brand Laboratory and the World Economy Forum. In 2006, “SINOCHEM” was listed among the “Top 20 Most Internationalized Chinese Brands in the Eyes of Chinese People All over the World”. In 2006, “SINOCHEM”, valued at RMB57.793 billion, ranked sixth among the “2006 Top 500 Most Valued Chinese Brands” by the World Brand Laboratory.
（3） Core Competitive Edges
Through the consolidation of five core business segments, i.e., Chemical Logistics, Rubber Trade, Chemical Industrial Business and Metallurgy & Energy, SINOCHEM Intl, starting from controlling the upstream resources and with its domestically leading distribution and logistics, has built an integrated chemical industry value chain of resource control, technical brand and sales & marketing service, and therefore domestically boasts unique competitive advantages in the industry.
The corporation's advantages-integration of the chemical industry chain resource
Internal industrial value chain of the corporation: SINOCHEM international has completed internal value cycle of production, marketing, and chemical logistics.
Integrated chemical industry value chain: SINOCHEM International will continue to develop business in upstream and downstream sectors at home and in foreign markets. By integrating the resource control, R&D, marketing, and financial services, SINOCHEM International will further strengthen its organizing capability on resource and market in core business sectors to form the complete integrative industrial value chain。
II.. Divisions
Logistics Business Unit
—— from sea and land logistics to industry guarantee, we contribute to solutions
The logistics division of SINOCHEM Intl is committed to becoming a domestically strong and Asia-wide well-known specialized liquid chemical logistics service provider and a good partner to medium/high-end customers globally. Currently, its main business covers shipping, container leasing and logistics, freight forwarding and storage, and the dangerous goods handling center that is still under development.
Shipping
SINOCHEM Intl is the largest internationally standard liquid chemical shipping operational entity in China, mainly engaged in the liquid chemical transportation on far/near sea international routes and coastal domestic routes as well as shipping management. With vast experience in operation and management of liquid chemical ships, it accepts and carries various oil products, liquid chemicals, acids, animal and vegetable oil, edible oil and other special products, and its routes span Europe, America, the Middle East and the Indian Ocean. Based on the company’s development strategy, SINOCHEM Intl, in 2006, conducted a second financing: RMB1.135 billion of which was used in the fleet building. By 2007, SINOCHEM Intl will have expanded its fleet to 30 ships.
Depending on Aoxing Ship Management Co., a joint venture with Stolt-Nielsen Transportation Group, SIONCHEM Intl’s shipping business has established a complete “safety management system” that meets international standards and continues to be perfected It has also obtained the ship safety management certificate (SMC), and is therefore capable of operating and managing oil tankers, bulk tankers, chemical tankers and liquid gas tankers of various tonnage. In addition it has received the international ship safety management compliance certificates from China and Panama,, passed DNW’s ISO9001-2000 certification, and conformed its fleet management to ISMC as well as testing criteria of large oil companies such as CNOOC AND SHELL, SECCO, etc. and CDI.
Container Leasing & Logistics
SINOCHEM Intl’s wholly-invested affiliate, SHANGHAI SAFE-TRANSPORT CHEMICAL LOGISTICS CO. provides solutions on container leasing and customized logistics. With its own internationally standard liquid chemical delivery fleet, it is mainly engaged in the transportation of liquid chemicals and food. The company’s business model is focused on delivery to end users from large chemical production plants and distribution of liquid chemicals in containers as required by customers. Of SINOCHEM Intl’s second financing fund, RMB240 million was used to increase investment in SHANGHAI SAFE-TRANSPORT CHEMICAL LOGISTICS CO., whose operation scale will soar to 1491 containers by 2007.
Freight Forwarding & Storage
SINOCHEM INTERTRANS CO., LTD., wholly owned by SINOCHEM Intl, has branches in Shanghai, Ningbo, Tianjin and Guangdong, and offices in Qingdao and Xiamen. With national Class A qualifications for freight forwarding, customs declaration and other relevant business, it has formed a logistics carrier for domestic distribution business together with over 100 warehouses and 15 freight forwarders all over the country, and has accumulated vast experience in storage, logistics subcontracting, and distribution.
Dangerous Goods Handling Center and Chemical Park Under Expansion
In the coming 2 to 3 years, SINOCHEM Intl will gradually set up dangerous goods handling centers at the main coastal ports, to further strengthen the capability of providing more comprehensive service to customers. In the foreseeable future, SINOCHEM Intl will invest in logistics facilities in China’s key chemical parks, to provide integrated logistics services to customers located there in so doing taking the lead in the logistics service in emerging chemical parks within China.
Rubber Business Unit
——we continue to raise value from cultivation and processing to sales and marketing, SINOCHEM Intl’s rubber trade is engaged in integrated operations at home and abroad, covering all the links in the industry chain, i.e., cultivation, processing and sales & marketing of natural rubber. It is currently the largest and strongest rubber marketing service provider in China, and also has an international reputation and core competitive edge in rubber resource gathering.
SINOCHEM Intl has set up natural rubber purchase bases in Thailand, Malaysia, Singapore, Indonesia as well as Hainan and Yunnan of China, held shares of YUNNAN NATURAL RUBBER INDUSTRY CO., LTD. and HAINAN NATURAL RUBBER INDUSTRY GROUP CO., LTD. Meanwhile, it extends into the area of raw material processing, as a controlling shareholder of HAINAN SINOCHEM RUBBER CO., LTD. and BANNA SIONCHEM RUBBER CO., LTD. In China, it is capable of processing 100 thousand tons of natural rubber, 70% of which is specially used for high-end radial tyres.
Through its sales network, center warehouses and other logistic distribution facilities all over the country, SINOCHEM Intl Rubber Business Unit provides customized value-added service to core customers represented by Bridgestone and Michelin, including the setting up of bonded warehouses in Shanghai, and Qingdao, . to enable the combination of US dollar trading, general trading and bonded business; SINOCHEM Intl’s Rubber Business Unit acts as an agent for over 10 famous domestic tyre enterprises to export tyres to the Middle East, Africa, North America, South America, Southeast Asia and Australia, and meanwhile processes tyres under the trademark of “SINOCHEM”.
With its quality service, strength and reputation, SINOCHEM Intl is leading the market in industry, becoming the agent general of EXXONMOBIL ‘s halogenated butyl rubber and Japanese JSR’s NBR in China and also the largest distributor of Dutch DSM’s EPDM in China. In addition, SINOCHEM Intl organizes the import of SBR from South Korea, Iran, and Thailand and butyl rubber from Russia.
Chemical Industrial Business Unit
——from branded industry to global market, we contribute to industry accomplishments
With years of experience in sales and marketing of Chloro Alkali and agricultural chemicals, and leveraging on its channel and resource advantages, SINOCHEM Intl’s Chemical Industrial Business is actively seeking the industry investment opportunity centered in the industrial chain of the products under its operation, to effectively ensure the sustained, stable and fast growth of sales and marketing business through industry investment and returns.
Chloro Alkali Business
Mainly engaged in PVC, Caustic Soda, Trichloroethylene and other products, SINOCHEM Intl has built stable cooperation with Sichuan Jinlu, Inner Mongolia Linhai and SINOPEC, gained a leading position in domestic markets including Jiangsu, Shanghai, Zhejiang and Guangdong, and international markets including India and Turkey, and formed a loyal customer group. Dedicated to sales and marketing in segmented markets, SINOCHEM Intl has made investment and set up a production enterprise, SINOCHEM SANLIAN (INNER MONGOLIA) PLASTIC RUBBER CO., LTD., in Inner Mongolia where there exists cost advantage in raw material and energy. Its Phase I productivity reaches 8 ton PVC and Caustic Soda respectively, and Phase II project is under construction.
Agricultural Chemicals
Mainly operating the imported agricultural chemical products including Roundup, Machete, Harness, Laso, Furadan and other brands, and cooperating with global leading suppliers of agricultural chemicals, including Monsanto, Syngenta, FMC, etc. in the model of sole distribution, regional agency, etc., SINOCHEM Intl leads in the high-end agricultural chemical market domestically and has established a mature and stable marketing network and sound customer service system composed of several hundred regional agencies and over 2000 root distributors. It also provides a lot of consulting service on cultivation and chemical application to farmers, winning their trust and welcome.
SINOCHEM Intl actively extends itself upwardly in the area of agricultural chemicals and accelerates its cooperation internationally. In May 2007, it purchased 28% shares of NANTONG JIANGSHAN AGRICULTURAL & CHEMICAL CO., LTD. Its goal is to become a globally leading specialized and internationalized supplier with own brand, production, sales & marketing and technology in the agricultural chemical area.
Chemicals Business Unit
——from technological R&D to network support, we contribute sales & marketing added value
SINOCHEM Intl’s chemical business is committed to providing efficient, economical, professional and environment-friendly chemicals distribution service to manufacturers and plant users home and abroad. Through the construction of distribution network and team as well as an operation system, and the support of a technical platform, it is becoming an influential service provider of comprehensive chemicals distribution at home and abroad.
With more than 50 years' history of import & export of chemicals, abundant experience of chemicals marketing, and good cooperating relations with upstream and downstream partners, SINOCHEM Intl has a product line ranging from basic chemical raw materials to polymer, synthetic materials and fine chemical products. With comprehensive logistics distribution, storage and technical support, distribution network covering major users of china, SINOCHEM Intl provides timely and full-scale marketing services to customers。
The import and internal trade business segment of SINOCHEM Intl’s Chemicals Business Unit consists of basic chemicals business, polyurethane business, aromatic hydrocarbon business, plastic business, polyester business and new product R&D center, with network spanning over Beiiing, Qingdao, Changzhou, Wenzhou, Quanzhou, Guangzhou, Chengdu, Wuhan, Manzhouli.. The export segment consists of chemicals export, Cuba export, metal export, East Europe export, medicals export, dyes export, etc., targeted at advantageous products in specific regions and exporting countries in the industry.
SINOCHEM Intl has made strategic alliances with DOW, BP, SHELL, EXXON MOBIL, CHEVRON, BASF, BAYER, SK, HONAN, SABIC, IPCC, FPC, PETROCHINA, SINOPEC and other famous international PETORCHEMICAL producers. In terms of domestic distribution business, SINOCHEM Intl provides professional turnkey distribution and delivery service to Fanyu Futian, Xiangyi Petrochemical, Zhejiang Juxiang, Dow Zhangjiagang, Jiangsu Sanmu and other industry No.1 enterprises in China, and offers economical and efficient service to many small/medium-sized enterprises as well.
Metallurgy & Energy Business Unit
——from resources exporting to mix operation, we contribute to green awareness.
The Metallurgy & Energy Business Unit has been dedicated to become a lead comprehensive operator integrating the production, logistics, technology, and trading services in the metallurgy and energy resource industries of china, with the major commodities like coke, iron ore, steel, and coal.
SINOCHEM Intl is a company that supplies metallurgy products and provides related services on a long term basis to steel enterprises world widely. Its coke exporting capacity maintains 1.5million tons annually and it is the biggest exporter for coke with major markets and customers spread in EU, India, Japan, South Korea, South Africa, and America. Many famous the largest steel groups in the world are the long-term customers of the company。
At the same time, SINOCHEM Intl also provides the combined operation of international purchase and supply business of raw materials such as coke, iron ore, steel and coal. While reinforcing and advancing the leading position of the existing service of coke trading and marketing, SINOCHEM Intl has, through consolidating the resource force through continued increase of investment in upstream, established its own environmentally friendly and high value-added coke production enterprises in Shanxi and Jiangsu with the commitment of being a good example of a good ecological contributor.
III. Social Responsibilities
——from a listed company to enterprise citizen, we play each role well
Creating profit is not the only mission and responsibility of SINOCHEM Intl.
We believe that the success of an enterprise is closely connected with the health and harmony of a society.
The growing SINOCHEM Intl values its social responsibilities while paying attention to the business benefits. The goal we are pursuing is to develop in harmony with society, culture and environment. Our mission is to make SINOCHEM Intl a respected listed company. SINOCHEM Intl is committed to undertaking responsibilities to all the stakeholders, including shareholders, employees, customers, communities, suppliers and the natural environment. We will maximize the overall value of the enterprise through a good understanding of various stakeholders’ respective pursuits.
Safety, Health & Environmental Protection
It is a fundamental responsibility of a modern enterprise citizen to protect people’s safety and health. We fully implement the safety, health and environmental responsibility system enterprise-wide, and integrate it, as a key management factor, into the production and operation activities
We pursue a sustainable development of the enterprise, attach importance to the harmony among production, operation, resources and environment, and strive to be a resource-economical environment-friendly enterprise. Within all the business areas we are engaged in we practice the national and industrial environmental rules, regulations and standards to make the society safe, reliable and produce quality products and services.
Public Welfare
Taking upon itself the development of a harmonious society, SINOCHEM Intl follows the public welfare idea of “Coming from the society, and returning to the society”, and actively undertakes social responsibilities, organizes social welfare activities and contributes to social development.
IV. Enterprise Culture
——pursuing excellence, we keep working hard……
The continuously developing historical mission requires us to hold the true qualities of “entrepreneur” at all times: Modest but brave, mild but persevering.
“Honest, Cooperative and good at learning; Earnest, innovative and pursuing excellence” are our common values.
Honest
Observe laws and regulations, be loyal to the cause, keep promises, and treat people equally
Cooperation
Cooperate with absolute sincerity, effectively communicate, be people oriented, and seek mutual benefit and win-win situations.
Good at learning
Be active and take initiative, keep learning, help each other to move• forward, and improve together
Earnest
Work carefully, behave well, pursue the truth and be practical and focus on efficiency.
Innovation
Keep pace with the times, adapt to reform, keep looking at oneself and develop oneself in effectively.
Pursue Excellence
Be value oriented, actively give a good performance, make unremitting efforts and compete for the lead
VII Strategic objective
The logistic strategic objective of SINOCHEM Intl is to become an Asia’s leading liquid chemical shipping business supplier, take a leading position in China in ISO tank logistic service, and continue to obtain rare logistic resources; rubber strategy is to attach equal importance to resource and marketing, enhance the integrated and international operation capacity, and deepen the industrial integration; chemical industry strategy is to establish the leading position of SINOCHEM Intl in pesticide industry of upstream and downstream integration in China and southeast Asia; distribution strategy is to continue resource control, strengthen the alliance of upstream and downstream, and establish global distribution channels.
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