In the first half of 2018, guided by the general idea of the 19th National Congress of the Communist Party of China and Xi Jinping's Socialist Thoughts with the Characteristics of the New Era, and Chairman Ning Gaoning's latest idea – "Science First, Unity of Knowledge and Action", Sinochem Petrochemical Distribution Co., Ltd. (Sinochem Petrochemical Distribution) earnestly implemented the strategic guidelines and 2018 work deployment of Sinochem Group and Energy Business Division. Specifically, the Company has comprehensively deepened reforms around key strategic tasks such as unified sales of products of Quanzhou Petrochemical, sales and market-oriented trade of ethylene products, and innovation of science and technology and business models, and established the core value of petrochemical product marketing. The Company delivered a physical commodity trade volume of 4.66 million tons and a warehousing and logistics volume of 2.6 million tons. The revenue reached RMB 15.7 billion, gross profit RMB 185 million and total profit RMB 84 million. This has helped Sinochem Petrochemical Distribution take a solid step towards the goal of becoming the best domestic petrochemical raw material supplier featuring "cutting-edge models, technology-driven, and reform-led".
On the morning of July 24, 2018, Sinochem Petrochemical Distribution held the 2018 interim work conference at its Shanghai headquarters, and its branches and subsidiaries attended the conference through video calls. At the conference, the Company's leaders summarized the work in the first half of the year, identified disparities and deficiencies, and clarified the requirements for the Company's work in the second half of the year based on Chairman Ning Gaoning's latest instructions on adhering to "Science First, Unity of Knowledge and Action".
As an operator of hazardous chemicals, Sinochem Petrochemical Distribution always takes safety as its priority. Before the conference, Yang Xiaozhen from the HSE Department shared the case of the sinking ship in Phuket Island that killed 42 people. Many of the victims died because they were not wearing life jackets. This accident sounds an alarm for all employees of the Company. They've learned that no matter when and where, whether in work or in life, they must be safety-conscious, and must not have a fluke mind, so as to avoid safety accidents to the greatest extent.
The conference was presided over by Deputy General Manager Wang Guolun. Mr. Wang first conveyed the general idea and requirements of the annual meeting of Group managers and the interim work conference of Sinochem Energy. Then he introduced to the Company's employees the brand-new requirement put forward by Mr. Ning, i.e., "Science First, Unity of Knowledge and Action". Setting out again after reform and transformation, Sinochem should take concrete action to become the real game changer in the industry.
Chief Financial Officer Zhang Tao made a detailed analysis of the Company's performance in H1. In the first half of the year, the chemical market was volatile and the price gap with crude oil narrowed. However, in such an unfavorable environment, the Company's performance indicators such as revenue, EBITDA, ROE and pre-tax profit were better than budgeted. Quanzhou Petrochemical's product sales have increased significantly. The market-oriented business volume has grown substantially. Collective selling and self-operated businesses have achieved effective collaboration, and the value of business integration becomes evident. However, in H2, the uncertainty of the external business environment is still increasing, and there still exists great operating pressure. Therefore, all business departments must firmly seize market opportunities to accelerate channel construction and ensure the smooth realization of the annual budget target.
Subsequently, Mr. Wang Guolun made a business analysis report for the first half of 2018, where he analyzed the plan completion progress of Sinochem Petrochemical Distribution during the period. He mentioned in the report that Quanzhou Petrochemical's collective selling achieved a production-sales ratio of 100.3%, which guaranteed the smooth ex-warehouse of products in refineries. The report also included a detailed analysis on the current business model and profitability of each product, with disparities and deficiencies in the ethylene pre-sales in H1 identified. Besides suggested measures for improvement, specific requirements for the promotion of comprehensive logistics and distribution were proposed as well.
At the end of the conference, General Manager Li Bo made a speech titled as Science First, Unity of Knowledge and Action: Deepen Transformation to Become the Best Domestic Petrochemical Raw Material Supplier Featuring "Cutting-edge Models, Technology-driven, and Reform-led". Mr. Li Bo first affirmed the Company's achievements in the first half of the year. He spoke highly of the hard work of the entire work team of Sinochem Petrochemical Distribution, and said that the Company's achievements are inseparable from the business departments' active adjustment of procurement and sales strategies and the support of functional departments. Alongside inspiring achievements, problems must be pointed out as well. Mr. Li Bo objectively analyzed the existing disparities and deficiencies in the improvement of business connotation, the advancement of strategic matters, and the mentality of all employees. In order to solve the above-mentioned problems and ensure the realization of the budget targets and strategic tasks for 2018, Mr. Li Bo emphasized that all employees of Sinochem Petrochemical Distribution must follow the instruction "Science First, Unity of Knowledge and Action" and seize every minute to work hard for the values of Sinochem Petrochemical Distribution. He specifically put forward the following requirements:
1. Decompose targets by week and month to ensure that the annual profit budget is completed on schedule;
2. Take actions as soon as possible on the specific strategic matters of pre-sales of ethylene, strengthen assessment, and implement the Company's previous resolutions;
3. Unswervingly promote scientific innovation, transform from a product seller to a solution provider, and strive to establish the core competitiveness of "application and R&D + supply chain services";
4. Comprehensively promote the deepening of reforms, enhance supporting mechanisms and systems, and ensure the smooth progression of innovative businesses and that risks are controllable;
5. Continue to strengthen management capability, and build and improve internal control management capabilities from the aspects of HSE management, risk control, futures hedging, and information upgrades;
6. Stay true to mission, follow the guidelines of the Party and carry forward industriousness to fully stimulate the enthusiasm and entrepreneurship of all Sinochem Petrochemical Distribution staffs, inspiring them to strive for the vision and goals.
Mr. Li Bo encouraged all Sinochem Petrochemical Distribution staffs to make unremitting efforts to overcome difficulties and help the Company become the best domestic petrochemical raw material supplier featuring "cutting-edge models, technology-driven, and reform-led".
