Who can represent China's oil and chemical industries

Who can represent China's oil and chemical industries

(Li Shousheng, President of China Petroleum and Chemical Industry Federation)

The annual Chemical 500 is released
.
It is of great significance
to review and summarize the remarkable achievements made in promoting the expansion and strengthening of chemical enterprises in the past 20 years, discuss and exchange the research results and practical experience of creating world-class enterprises in the industry, and study the strategic measures for accelerating the construction of world-class enterprises in the whole industry under the new situation.

Twenty years ago, when we first held the China Chemical Top 500 conference, the combined sales revenue of the top 500 companies accounted for only 20% of the industry, and last year this proportion exceeded 70%.

The threshold for entry of the top 500 enterprises that year was 100 million yuan in main business income, which exceeded 1.
6 billion yuan
last year.

This brings me to something
.
In 2015, when we were preparing the 13th Five-Year Plan for the industry, I told several multinational companies that we would put forward the goal
of leapfrogging from a petrochemical country to a strong country.
After listening to my introduction, they asked me three questions: First, what kind of standards are you proposing for a petrochemical power? Second, how long will this leap in China's petroleum and chemical industry take? Third, when China becomes a petrochemical power, which enterprises can represent China?

I also answered
all three questions.
I said that the petroleum and chemical powers we propose have at least four symbols: first, there are a number of core technologies with independent intellectual property rights and occupying the commanding heights of the industry; Second, there are a number of large enterprises and enterprise groups with international competitiveness; Third, it has a group of world-class technical and management talents and product brands; Fourth, it has world-class industry operation efficiency and economic benefits
.
Q, how long will it take for China's petroleum and chemical industries to complete the leap from a big country to a strong country? My answer is that it will take at least 15 years, that is, the time of
3 "five-year plans".
Q, when China becomes a petrochemical power, who can represent China? My answer is that there are many enterprises that can represent China, such as PetroChina, Sinopec, CNOOC, Sinochem, ChemChina, and I have named all the central enterprises
.
But at the time, several CEOs of multinational companies had almost no expression on their
faces.
I could see that they didn't quite agree with me
.
I asked them, who do you think can represent China? BASF CEO Dr.
Bo Kaici told me that he believes Yantai Wanhua can represent China! Later, they told me that the central enterprises you talked about were all large enterprises formed in the context of
the state, and did not grow up in market competition.
Of course, their views may not be entirely correct, but I think we should think about their views in a positive way, thinking about what a world-class company
is.

In the report of the 20th National Congress and the "Guiding Opinions on Accelerating the Construction of World-class Enterprises" deliberated and adopted by the 24th meeting of the Central Deep Reform Commission, General Secretary Xi Jinping put forward the 16-character goal
of "excellent products, outstanding brands, leading innovation, and modern governance" for world-class enterprises.
These 16 words will surely provide a fundamental follow-up and practical direction
for China to accelerate the construction of a world-class enterprise in the "14th Five-Year Plan" and even longer.

Let me now talk about my understanding
of these 16 words.

Product excellence is the hard power of an enterprise and the last word
of development.

The image of the product is the image of the enterprise; The quality of the product is the level of
the enterprise.
World-class companies must have excellent products
.
What is excellence? It is outstanding, beyond the ordinary, can be higher than similar products, stronger, can bring consumers a richer sense of gain, a thicker sense of happiness, a more wonderful sense
of sublimation.
World-class enterprises should have truly high added value, high-tech content, distinctive and core competitiveness products
.

Outstanding brand is the soft power of development, but also the hard work
of enterprises.

Brand is an important embodiment of the competitiveness of enterprises and even countries, and an important resource
to win the world market.
At the same time, brand building is also a shortcoming
that our industry and our company have not paid enough attention to for a long time.
What is a great brand? It is excellent and remarkable
.
Excellent refers to the connotation, and the connotation of the brand should contain excellent quality content, functional content, cultural content, and spiritual content; A good brand should be a household name, should be world-famous, and should become a banner flying high in the world economic market
.

Leading innovation is the driving force of development and the engine of high-quality development of
enterprises.

Whether it is excellent products or outstanding brands, it requires innovation leadership to constantly catalyze, change and sublimate
.
Which company is the first to master the core technology, which company will master the future of this industry, this is the extreme importance of
innovation.
To lead in innovation, we must make our own scientific and technological research and development, talent resources become highlands, and we must have a unique set of innovation methods, management systems and technology sources, which is the fundamental driving force and core competitiveness
of our industry to create world-class enterprises.

Governance modernization is the guarantee of development and the cornerstone
of the system to accelerate the construction of world-class enterprises.

Management and system are important guarantees
for world-class enterprises.
First-class management and system come from first-class management ideas
.
The report of the 20th National Congress put forward for the first time the new concept
of "Chinese-style modernization".
Chinese-style modernization is socialist modernization led by the Communist Party of China, which not only has the common characteristics of the modernization of all countries, but also has Chinese characteristics
based on its own national conditions.
In the course of practical exploration, we should constantly enrich and enhance the concept and connotation
of "Chinese-style modernization".

Indeed, on the whole, China's petroleum and chemical companies have made great
progress.
Taking the Fortune Global 500 list as an example, the number of companies on the list in China has increased by 11 times
in the 20 years from 2000 to 2020.
In 2019, there were 129 companies on the list in China, surpassing 121 in the United States for the first time, 133 companies in China and 121 in the United States in 2020, 143 companies in China on the list in 2021, an increase of 10, and 122 companies in the United States, an increase of only 1
.
It shows that China's enterprises are superior to the United States
in terms of growth, market potential, development prospects and development space.
Among the 133 Chinese companies listed in 2020, there are 11 petroleum and chemical companies, in addition to Sinopec and PetroChina, which continue to rank among the top five, China National Offshore Oil Corporation, Hengli Group, Sinochem, ChemChina, Yanchang Petroleum (Group) Corporation, Cedar Holding Group, China Aviation Oil Group, Taiwan CNPC Co.
, Ltd.
, and Shenghong Holdings Co.
, Ltd.
, ranking 64th, 107th, 109th, 164th, 265th, 296th, 305th, 409th and 455th respectively
。 In addition, there are 15 energy companies involved in the coal chemical industry, and we have 26 companies on the list, ranking first
in China's industrial sector.

However, while seeing the continuous expansion of the scale of Chinese enterprises and the increasing number of large companies, we must also see that the problem of Chinese enterprises being large but not strong is still very prominent
.
Compared with the world's top 500 companies, the average sales revenue and average net assets of Chinese enterprises have reached the average
level of the Fortune Global 500.
However, the profitability level (profit margin on sales revenue) of Chinese companies is only 5.
4%, and the average return on net assets is 9.
8%; The average profitability of U.
S.
companies is 10.
5%, and the average return on equity is 17%.

In particular, the per capita profit creation gap of domestic enterprises was 57,300 yuan in 2019, while the per capita profit created by foreign enterprises in the same period was 695,100 yuan, and the difference in per capita profit level at home and abroad was more than
10 times.

I think the root of the overall gap lies in the individual gap
.
In the next step, the focus of our industry benchmarking must be placed on individual micro-benchmarking
.
This kind of benchmarking is more targeted and motivating
.
Different industries and different enterprises must choose an enterprise with the same industry and the same product type for benchmarking, so that the gap found is really meaningful
.
In the benchmarking of enterprises, I hope that every enterprise should firmly focus on 4 core areas:

First, focus on corporate strategy
.
Strategy is a choice
for the future.
Only when a company knows where it is going can it reach its destination
as quickly as possible.
Companies that have already started to walk without knowing their destination will be full of blindness and danger
.
Strategy is the direction and goal of guiding the future development of enterprises, and is the advanced and accurate choice
of market positioning.
Almost all world-class enterprises have their own advanced corporate strategy, and advanced, accurate and clear corporate strategy has become the primary feature of
world-class enterprises, especially "century-old stores".
In the current world market is constantly changing, rapid technological changes, extremely fierce competition, the market leaders are rapidly changing, today is the market leader, does not mean tomorrow is still the market leader
.
In order to ensure the leading position of the enterprise tomorrow, every enterprise must work the corporate strategy
.

The second is to focus on the products
of enterprises.
Products are the meticulous work
of enterprises dedicated to consumers and the market.
In a certain sense, the image of the product is the image of
the enterprise.
Apple mobile phone represents the image of Apple, Toyota represents the image of Toyota, polymer materials represent the image of BASF, MDI represents the image of Wanhua Chemical, rubber liquid fluidization technology represents the image of Sailun Company.
.
.
Any enterprise speaks in the market is a product, consumers are also based on the product to know the enterprise
.
An important criterion for creating a world-class enterprise is to have excellent products
.
For industry leaders, you must be clear that among your company's products, several of them belong to the industry, belong to the world's first or only products, and belong to the first or only product in the market, which is your strength
.
Because behind your company's first or only product, it is the embodiment of the company's technical level, the embodiment of the company's innovation ability, and the embodiment
of the company's customer needs.
In the pursuit of product excellence, any company is not the best, only better, which is a never-ending pursuit process
.

The third is to focus on enterprise operation efficiency and economic benefits
.
Why is operational efficiency so important? Because the indicators of operational efficiency not only represent the advanced level of enterprise productivity, but also represent the advanced degree
of production relations.
Operational efficiency is the comprehensive embodiment of strategic management, technology management, process management and personnel management of the entire enterprise, and it is also the fundamental symbol
of a world-class enterprise.
It is precisely at this point that there is still a big gap
between our enterprises and multinational corporations.

The fourth is to focus on users and market services
.
At present, the world's chemical powers have put serving users and markets in a prominent position
in their core competitiveness.
The Japanese chemical industry proposes that the chemical industry should create a comfortable life for the Japanese people, and let the Japanese people feel the contribution
of the chemical industry to a comfortable life every day.
Japanese chemical companies need to provide "impressive services"
to users and markets.
For more than 180 years, BASF has put customer service first
.
In its new company strategy for the next 10 years, BASF has clearly put forward the slogan
"Creating new chemical roles".
In serving users, BASF has made a major change in differentiating user services for different businesses, moving from traditional services to customized services, providing users with a range of high-performance products
.
Their wish is that whenever a user encounters difficulties, the first supplier that comes to mind is BASF
.

The above four focus areas of benchmarking, I hope that every entrepreneur can find out the gaps, formulate measures, implement responsibilities, and improve within a time limit according to the method of self-diagnosis, and promote the construction of
world-class enterprises in the whole industry with solid benchmarking.

Mr.
Li Weicheng, CEO of Dow Chemical, once told me that in the eyes of multinational companies, China's petroleum and chemical industry is a raw material industry
.
You do not pay attention to the end market, and the industrial chain does not extend to the end market, only selling bulk raw materials
.
At the same time, he also told me that the technical content of terminal products is not low, and the economic benefits are not bad, and he hopes that China's petroleum and chemical industries will boldly embrace the terminal market
.
Therefore, focusing on users, focusing on the market, and comprehensively improving the level of our industry serving users and markets, the gap is huge, the space is grand, and the prospects are great
.

In the face of nearly 30,000 enterprises in China's petroleum and chemical industry, I would like to ask a sharp question, who can represent China's petroleum and chemical industry at present and in the future? In the United States, there are DuPont and Dow that can represent the United States; In Germany, BASF and Evonik represent Germany; In Japan, there are Mitsubishi and Mitsui can represent Japan, who in China can stand up and say, I can represent China? There may not yet be a company with such capital and level
.
But today, I want to add that when China builds a power in the petroleum and chemical industries in 2030, there will be companies that will stand up and say, I can represent China!