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Sinopec Speeding up Successive Reorganization
China Petroleum and Chemical Corporation (Sinopec Corp.) is speeding up successive reorganization and has launched large-scale strategic structural adjustment to downstream oil defining and chemical business, according to its business development program disclosed to its investors.
On October 10, 2000, the Lanzhou Petrochemical Corporation under Sinopec in northwest China was established; on October 18, a new Daqing refining and chemical company was set up on the basis of the merger of the Daqing Oilfield Chemical Plant and the Linyuan Petrochemical Company in northeast China. This move plays a substantial role in bringing about the integration of the business of the two companies, cutting costs, raising the abilities of profit making, market competitiveness and risk resistance. Meanwhile, it will improve the operation of China's oil refining and chemical businesses.
One year ago, the reorganization and restructuring of Sinopec aimed to separate non-nucleus business in favor of the nucleus one, so that the company operates in accordance with international standards, resulting in the substantial increase of its profits. The merger and reorganization of the said companies this time is an important measure of Sinopec's strategy for the sustained reorganization of its oil refining and chemical businesses. The other two parts of the strategy are: First, closing or suspending the operation of a group of small oil-refining and chemical installations and factories that yield low economic returns, process at high-cost, use backward technology and are far removed from the market. Second, separating oil refineries from the original oil fields, the reorganization and merger has led to more distinctive division of business and the improvement of the technological and managerial level.
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