Ren Jianxin started his industrial cleaning business with a 10,000 yuan loan in 1984 and couldn't have imagined he would one day lead one of China's top chemical companies.
Ren, 50, was appointed president of China National Chemical Corp (ChemChina) when the company was established in 2004. The company's assets and sales have both surpassed 100 billion yuan.
"In the past three years, our sales have seen 92 percent year-on-year growth and profits have risen 71 percent annually," Ren told China Daily in an exclusive interview.
"We have started 46 manufacturing facilities, this year we will see another 26 facilities come onstream," he said.
Along with PetroChina, Sinopec and CNOOC, ChemChina is one of the five largest companies in the country's petroleum and chemical sector.
Different from PetroChina and Sinopec, which have a big presence in the upstream business, oil and gas exploration and development, ChemChina will "focus on the development of new chemical materials and specialties", Ren said.
This is in line with the development of China's chemical industry. China has become the world's largest chemical products manufacturer, but in areas of chemical specialties and fine chemicals, Chinese enterprises still have a long way to go.
To catch up with foreign peers, Chinese companies should develop more advanced technologies, Ren said.
Analysts say the country's chemical industry will continue to witness fast development and will also see more consolidation in the next five years.
"We'll take advantage of this to further develop our business," Ren said.
Overseas expansion is a key driver for the company's development. Last year ChemChina drew attention with its cooperation with US private equity firm Blackstone Group.
Under their agreement, Blackstone will invest $600 million for a 20 percent stake in China National Bluestar Group Corp, a wholly owned subsidiary of ChemChina. It also marked Blackstone's first investment in China.
"We need the Blackstone fund for further development. What's more, by bringing in a strategic investor, we will greatly improve our corporate governance," Ren said.
Cooperation with Blackstone is among several overseas deals ChemChina has made in the past three years. In 2006, the company acquired the France-based Adisseo Group, a leading global animal nutrition feed firm specializing in producing methionine, vitamins and biological enzymes. The same year it bought French company Rhodia's organic silicon business, including its technology and distribution channels.
"You can have many options for overseas growth. For instance, you can form cooperation agreements with foreign companies, you can also open plants abroad," Ren said. "But for ChemChina, the best choice is to take over some foreign companies. Through such deals we can access larger markets, advanced technology, as well as more talent, which will make our company more multinational," he said.
The Adisseo deal has greatly extended ChemChina's product line. It made the company the world's second largest producer of methionine.
The Rhodia acquisition has upgraded ChemChina's organic silicon business, making it the third largest producer in the world.
"All our past deals have proved to be successful. We will continue to talk with some foreign companies about takeover opportunities," said Ren.
Emissions control
Saving energy and cutting pollution are the top priorities for Ren this year. "Emissionscontrol will be our most important priority in 2008."
ChemChina will not approve any new project that can't meet its emissions control target. It will improve its existing facilities to make them more energy-efficient and environmentally friendly. The company will also close plants that can't meet its emissions targets within the prescribed time.
"This year we have set aside 1.5 billion yuan for our emissions control program," Ren said. "It is not only to show our corporate responsibility, but also for sustainable development of the company."
Wastewater treatment will form a large part of ChemChina's 2008 emission control plans as the company consumes large amounts of water each year.
Its water treatment effort will be divided into several phases. The first step will be pilot projects at several chemical plants. Experts have already started research for the projects, the operation of which will provide useful experience for other ChemChina companies.
Efforts will also include improving the technologies used for effluent treatment at refineries and eliminating chlorine and alkali discharges.
"From 2008, all companies under ChemChina will make their own specific plans on energy and the environment," Ren said.
(China Daily March 15, 2008)
