After 30 years of agitation, China has become the world's largest producer of chemical products, accounting for one-third of the global chemical market; at the same time it has become the second largest chemical consumer market after the United States.
In 1984, the total output value of China's chemical industry was 46.56 billion yuan. In 2013, China's main business income from chemical industry was 8.1 trillion yuan. Only from a digital point of view, China's chemical industry has grown 174 times in 30 years.
However, it is worth noting that the competitive landscape of the world petrochemical industry is changing. The North American shale gas revolution has brought severe challenges to the development of the petrochemical industry. The impact of shale gas chemistry on petrochemicals may soon come. On the whole, the future corporate market strategy must inevitably begin with low-cost energy, high-tech technologies, market demand and environmental needs.
Li Shousheng, executive vice president of the China Petroleum and Chemical Industry Federation, believes that China's oil and chemical industry can focus on five strategic areas in the future: the consolidation of traditional industries' advantages and competitiveness; the development and breakthrough of new energy fields; modern coal chemical industry Breakthrough and development of innovative advantages; High-end technological breakthroughs and key developments in new chemical materials; New technologies in environmental protection industries and productive service industries nurture and leapfrog development.
For the multinational giants, the Chinese market is no longer the same language. Where do they go, what kind of strategy will they have, and what are their perplexities?
The decision-makers of cross-border chemical giants such as LANXESS Chemical and BASF explained the future strategies of their companies from different perspectives. Overall, it can be concluded that the importance of the Chinese market is undoubted and future investment will remain relatively stable. Level, but the worry of overcapacity will increase; companies will pay more attention to cost control and profitability.
BASF Turns to Smart Growth
Oral | BASF’s Asia Pacific President, Greater China President and Chairman Hou Yuzhe
China is BASF’s third largest market in the world, second only to Germany and the United States.
In 2013 BASF announced the "smart growth" strategy in the Asia Pacific region. In the future, BASF's development in the Chinese market will shift from scale growth to intelligent growth and quality growth. The goal is to increase sales in Greater China to 12 billion euros in 2020. By then, 25% of BASF's global R&D activities will be carried out in the Asia Pacific region, and 75% of sales in the Asia Pacific region will come from localized production. This ensures reliable supply and strengthens cooperation with local customers, and maximizes the efficiency of resource utilization through integration, reducing the consumption of product transportation.
In order to achieve the 2020 goal, BASF will invest 10 billion euros in the Asia-Pacific region between 2013 and 2020, of which about half will invest in China.
Four major trends that Bayer materials must face
Oral | Mr. Miao Bole, President, Bayer MaterialScience China
Population growth, deepening of urbanization, motorization and changes in population structure will be the four major trends that the chemical industry will face in the future. The direct impact is the shortage of raw materials and energy.
In the Chinese market, we are ushering in an important turning point in development. In the past 15 years, Bayer is in the construction phase in China, but in 2015 or 2016, Bayer will enter the force period. This is in line with China's human-centered urbanization, which has achieved a new wave of growth through environmental protection and the pursuit of higher efficiency.
The GDP growth of the Chinese economy is gradually being driven by investment to domestic demand. This is a major advantage for us. This will have a direct pull effect on the demand for products. In particular, the development of the IT, automotive, construction and coatings industries will drive demand for high-performance materials. 50% of the global automotive industry, 60% of the furniture industry, and 80% of the footwear industry are produced in Asia, which means huge market potential in the future.
The short-term overcapacity phenomenon can be understood that the long-term surplus will bring about bigger problems. We consider the issue of overcapacity from three perspectives: First, the relevant management departments can use scientific measures to adjust the production capacity, try to ensure that the industry's production capacity and market demand to adapt; Second, excess production capacity is the embodiment of investment overheating; Third, relevant departments still need to continue to strengthen the implementation of policies and regulations.
Solvi pays attention to new round of mergers and acquisitions
Oral | Zhu Mingyue, President of Solvay Greater China
Solvay's experience shows that a multinational corporation and even a large industry must adapt to the general trend and adjust the industrial structure in a timely manner. In the course of structural adjustment and transformation and upgrading, scientific research and development are driving forces.
Nowadays, the commercialization and specialization of special products are very fast, the cracking cycle of technical secrets is shortened, and the technical barriers are getting lower and lower. If we do not have the ability to continue scientific research and innovation, it is increasingly difficult to rely solely on product advantages to establish lead advantages. . Therefore, the impact of firm size and overall strength on the ability to continuously innovate is crucial.
In the past ten years, companies in the chemical industry for specialty chemicals have basically been acquired, and companies with a scale of 6 billion to 8 billion euros are becoming the general standard for large-scale mergers and acquisitions. The phenomenon of this new round of consolidation in the chemical industry should attract attention. Chinese companies can pay attention to the opportunities that multinational corporations generate during business adjustment.
Solvay will take three major growth measures in the future. First, organic growth, both through the strengthening of internal technological transformation, promote structural adjustment, increase cost-effectiveness, and then to achieve the growth of autonomy; Second, the extension of growth, that is, through mergers and acquisitions, effectively speed up the integration process; Third, innovation and growth.
Mitsui Chemicals First Resolves Chemical Structure Problems
Oral statement | Mitsui Chemicals Co.,Ltd.
China's economic development has been troubled and the Japanese media have been overwhelmed. It does not mean that China’s economic development is overheating, which means that the Chinese economy has started to slow down. Although there may be no more than 10% growth in the future as it has in the past, at least from a macro perspective, the Chinese economy will maintain a stable growth rate of 7% to 8% over a period of time. As a result, China’s future demand for chemical products will continue to rise.
Now China has ushered in the best time for countries, industries and enterprises to work together to solve the structural problems of chemical products.
In contrast to the development of the petrochemical industry in Japan, from the point of view of Japanese companies in China, the petrochemical industry needs to face the following issues: First, some products may encounter large-scale overcapacity issues in the future; Second, China needs to be in line with China. Social-economic demand adjustment plans; government-level countermeasures have been implemented in steel, cement, glass, and other areas; and the chemical industry also needs positive responses from governments and industry groups.
LANXESS chemical raw material supply is short board
Oral statements | Qian Mingcheng, President of LANXESS Chemical Greater China
In the future, global development faces four major trends: green motorization, urbanization, demand for clean water, and sustainable development of agriculture. LANXESS is particularly optimistic about motorization and urbanization.
For chemical companies, the current pressure from raw materials is very high. Raw materials and markets determine investment. In China, raw material supply is short, and market demand is an advantage. LANXESS is concerned about the degree of openness in the future of the policy. Mixed ownership will be one of the focuses. Looking back, when the business of LANXESS Chemical was separated from Bayer in 2004, the assets in the Asia-Pacific region were only 5%, and by 2015, this figure will reach 35%.
Air Products Company Pays Close Attention to Coal Chemicals
Oral | Philip, Global Vice President, Air Products
China’s coal chemical industry ranks first in the world. Among them, coal-to-natural gas and coal-to-oil are the most promising coal chemical project types in the medium and long term. Coal chemical installations must be equipped with large industrial gas supply facilities. It is estimated that 70% of air separation devices in the world will be sold to China.
Air Products Corporation and other companies are fully adapting to the trend of diversification and lightening of petrochemical feedstocks. On the one hand, they are proactively seizing opportunities for coal-to-olefins projects on the basis of moderate investment. On the other hand, their technology for steam methane reforming to synthesis gas is in the world. Leading level, you can always seize the opportunity of shale gas chemical development.
Faced with the challenge of large investment in coal chemical industry and supporting air separation projects, Air Products has adopted prudent investment; on the one hand, China has invested a large proportion of its annual investment of US$2 billion in its budget. At the same time, through the localization of equipment and other means to continuously reduce the cost of equipment construction, in the past three years, Air Products Corporation has taken a series of effective measures to reduce the cost of large-scale air separation plants by 30%.
Dow Corning realizes productivity revolution as soon as possible
Oral | Zhang Kangming, President of Dow Corning Greater China
In the future, the development of the silicone industry will face three major challenges: First, the average growth rate of the industry is limited, the growth rate is expected to be equal to the growth rate of the world economy, and the GDP growth rate in China and China are equal; second, the conversion of silicone materials from high-tech products to bulk The prices of products continued to drop, and the output and market scale continued to expand. Third, China's organic silicon industry policy was not yet clear. On the one hand, the whole industry chain was facing overcapacity and low prices, on the other hand, high energy consumption, low efficiency, and high environmental risks. The local metal silicon, single crystal silicon production or rough processing enterprises can often receive protection and subsidies from local governments and cannot achieve survival and elimination of the inferior through market-based measures.
Dow Corning’s research on the company’s internal and upstream and downstream suppliers and customers shows that costs, labor shortages, work environment and labor rights, the environment, energy and energy conservation, and geographic expansion have become issues of great concern to foreign-invested manufacturing companies in China. In capital-intensive industries, China's investment cost advantage is not obvious, but it has obvious advantages in terms of market size and supporting the upstream and downstream industrial chains. Increasing production and operating costs, increasingly stringent environmental regulations, and increasingly scarce land and labor resources require China to advance and realize a revolution in productivity as soon as possible.
Celanese Increases Profitable Business
Oral | Celanese Senior Vice President of Asian Affairs O'Brien
The Chinese market is showing three major trends. First, with the slowdown in GDP growth and the intensification of market competition, it will be more difficult to find opportunities in the Chinese market than before. The Celanese acetic acid business has been growing at a rate 1.3-1.5 times that of China's GDP, but it will be difficult to maintain such a high growth rate in the future.
Celanese mainly focused on two factors at the beginning of entering China: market space and raw material supply with price advantages. However, compared with the United States and the Middle East, the cost advantage of Chinese raw materials is gradually diminishing. For example, the price of coal is twice as high as 8-9 years ago, while the price of natural gas in the United States is reduced by half.
Celanese's development in the Asia-Pacific region has three goals: to increase the profitability of the business; to relocate in the Asia-Pacific region, especially in the business areas that are not currently involved; and to establish an organizational structure for more efficient operations.
INVISTA hopes to be more fair
Oral | Inovetta Global Senior Vice President Ke Ruo Nan
The redundant construction of redundant production capacity has continued without interruption, and the average profit rate of some products in the chemical fiber industry has been approaching zero, but new production capacity has continued to be launched.
Short-term market protection is implemented on the basis of “technical autonomy†and “market self-sufficiency.†Some companies are keen to invest in the “first-in-a-box†devices for domestic products that have technological gaps and high import dependence. These first-set devices are often cost-effective. High, low efficiency, and lack of market competitiveness have prompted companies to strongly request the government to take anti-dumping measures on related imported products. This will, on the one hand, cause losses to other companies in the industry chain. On the one hand, it will provide space for more backward production capacity in the short term, leading to an increase in long-term overcapacity.
In this regard, we believe that we must first establish and implement a more liberal and fair market competition mechanism; secondly, formulate a reasonable energy policy.