Sinopec Chemical Sales Branch Company Set Up in Beijing

On 10 May 2005, China Petroleum & Chemical Corporation (Sinopec) had its Chemical Sales Branch Company (Chemical Sales Branch) officially set up in Beijing.

Zhang Jianhua, Senior Vice President for Sinopec, presided over the conference in celebration of the incorporation of the Chemical Sales Branch, and read out the written documents regarding the incorporation of the Chemical Sales Branch Company and the establishment of its three regional branches respectively in Beijing, Shanghai and Guangzhou. Chen Tonghai, GM for China Petrochemical Corporation (Sinopec Group) and Chairman for Sinopec, Wang Jiming, Vice Chairman for Sinopec, jointly unveiled the plaque for the Chemical Sales Branch. Chen Tonghai, Wang Jiming and Wang Tianpu, President for Sinopec later conferred the plaques to the three regional branches respectively.

Over more than past 2 decades, Sinopec has embraced quick business expansions and also undergone multiple reforms, and has now turned out China?s largest manufacturer and seller of oil products, and chemical products. In terms of oil refining capabilities and ethylene producing capabilities, Sinopec has been ranked in the 4th place and the 6th place respectively among other players in the world. Seen from the perspectives of oil refining and sale of finished oil products, Sinopec has already built up a oil products marketing network comprising oil refineries, pipelines, oil depots, and petro stations. Besides, Sinopec is now obtaining even stronger abilities in dominating the domestic market of finished oil products. Seeing from the perspectives of production and sale of chemical products, Sinopec?s ethylene production capacity has accounted for 4.25 million tons/year in 2004, constituting more than 70% of the country?s total in the same year. As the Yangzhou-based BASF project and Secco-based ethylene project were put into production already, and with the launch of new ethylene projects and also expansion of certain existing ethylene projects, Sinopec?s chemical products are going to expand an increasingly expanding share in the market.

Due to many reasons (in historical and other terms) however, Sinopec  has always had its chemical products distributed in a separated way, and failed to lick into shape a ?one-fits-all? distribution network, set up a uniform ?Sinopec Brand?, and establish its marketing edges by means of its established competitive edges in terms of product technology. As a consequence, Sinopec  has been impeded from readjusting its product mix, developing new products, exploring the market into depth, distributing its resources, managing its customer base, constructing its distribution network, planning out and optimizing its operation strategy and marketing strategy, bringing into play its overall advantages established in the chemicals segment and gaining even stronger competitive forces in the market; in the meanwhile, a vast number of Sinopec?s customers have also suffered much inconvenience in purchasing products turned out by Sinopec . In recent years, especially after China became a member of WTO and with the quickened pace of economic integration worldwide, the market scenario has undergone great changes; and the competitions among players in the market of petroleum and chemical products have grown fiercer and fiercer day by day. In an aim to stand out in the market that features increasingly intense competitions, Sinopec  has adhered to its long-term strategy for overall business expansion, and also quickened up its pace in reforming its mechanism for marketing of petroleum and chemical products; besides, Sinopec  has set up a Chemical Sales Branch Company, plus three regional branch companies in Beijing, Shanghai and Guangzhou respectively, in order to strike up and consummate a distribution network, which makes a fusion of the direct selling mode and the distribution mode (the direct selling mode plays a leading role). This move is of great significance for Sinopec to have its industrial chain integrated, give prominence to its core business, bring into full play its holistic advantages established by means of its integrative business operation, enhance its overall competitive forces in an all-round way, strengthen its abilities in dominating the market of petroleum and chemical products, and also maximize its benefits as a whole.

Wang Tianpu pointed out in his speech delivered in the plaque-unveiling ceremony that, ?after this Chemical Sales Branch Company was established, Sinopec  shall, under the precondition of retaining its current market share, distribution system and customer base, and also realizing a smooth transition from the old distribution system to the new distribution network, and pursuant to the requirements in the new operating system and mechanism, unify its marketing strategies, market exploration practices, logistics optimization practices, resources deployment practices, selling behaviors and brand awareness promotion strategies; accomplish the planning and deployment of its marketing network as quickly as possible; standardize its customer relations management practices; put its distribution channels in due order; consummate various intramural management systems and measures of its own; do its utmost to start trial operation in July, and put the ERP system into service, and initialize the fresh mode of business operation in a comprehensive way, by the end of the year. He hopes that those oil refining and chemical production enterprises affiliated to Sinopec  shall take into account the holistic business needs of Sinopec , coordinate closely with this Chemical Sales Branch Company, follow the demands in the market, organize their production work as planned, have such links as production, distribution and research associated smoothly on their initiatives, and concentrate their efforts on performing such tasks as improvement of product quality, expansion of product variety, substitution of imports by use of domestically-produced counterparts, and reduction of operating costs, as well. During the reform- reform-incurred transition period, it is necessary to stabilize the team of marketing specialists, cling to the marketing strategy featuring ?follow the market demands closely, sell out all products turned out, and realize the optimal selling prices in the current period?, and do a brilliant job in marketing work, for the nonce.

In the end, Wang Tianpu accentuated that after the Chemical Sales Branch Company was set up, Sinopec  would adhere to its business motto, characterized by ?effective competition and constant opening-up? as ever, honor its guiding principles of ?standardized business practices, integrity and solid creditworthiness?, stick to its creed ?get adapted to the market demands and serve customers with a considerate attitude?, intensify its communication with a vast number of its customers further still, improve mutual understanding of and cooperation with its business partners, boost the common developments of both the buyer and the seller in a balanced manner, and create a ?win-win? situation, as well as contribute to the sustainable development of China?s petroleum and chemical industry.

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