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When the BP Group, one of the world’s three largest energy giants, announced its decision to divest olefins, polyolefins, and nitriles a year ago, it has shocked the global chemical industry. Today, a new chemical called INNOVENE Giants made their debut. As a separate entity of BP Group, Yinuo Chemical has assets of more than US$9 billion and annual sales of US$15 billion. BP announced that it plans to sell its shares in Yinuo Chemical in the way of IPO in the second half of the year. This move shows that the concept of upstream and downstream integration has been shaken.
Few MNCs have experienced mergers and acquisitions in the history of development. Each acquisition has contributed to the rapid growth of some companies, and each stripping purpose is to make the core competitiveness stronger. Has this step taken by BP been a win-win for BP and the new company Econo, which was born out of BP? Last week, Ralph Alexander, CEO of Yinuo Chemical, and Meng De, President of China and Asia Pacific received an exclusive interview with this reporter in Shanghai.
Why BP splits chemical business
In the 1990s, the cross-border merger of BP and Amoco was widely considered as the largest merger case in the industry at that time. After that, Amoco, Arco, Castrol and many other famous brands were successively received by BP. BP1 Leap became the third largest oil group in the world after ExxonMobil and Shell. The goals that BP has focused on over the years seem to be more focused on upstream oil and gas exploration. Yinuo Chemical CEO Alexander pointed out that in a huge company like BP, oil and natural gas exploration accounted for 90% of its business, and the proportion of downstream chemical business was relatively small, so in the development strategy, BP is difficult for chemical industry. Business gives due attention and energy.
BP's separation of its olefins, polyolefins and nitriles business while retaining the acetic acid and aromatics business with a return rate of nearly 20% means that it must obtain more profits from the upstream core business and chemical products with strong competitive advantages. Therefore, the separation of non-core business is an inevitable choice.
Yi Nuo Chemical stands out
Despite the fact that the chemical company was a huge energy company such as BP, the proportion of its chemical business could not be given enough attention. However, the separated Novartis Chemical has become the top five petrochemical companies in the world due to its annual production of more than 15 million tons of petrochemical products. One of them and ranks among the Fortune 150 companies. If it is difficult to form an independent development strategy for the chemical business when it is in BP, then the isolated Econor Chemical will undoubtedly gain a greater freedom of development and be more competitive. Talking about the new Econol Chemicals, Alexander explained that this is an exciting company.
The biggest difference between Yinuo Chemical and BP, which is separated from BP, is that it will be very cautious in investment strategy and strictly control costs. At the same time, in terms of company operations, the organization is relatively simple and the action is more agile and flexible. Management is also greatly simplified.
Half of the assets of UConn Chemicals, headquartered in Chicago, USA, are located in Europe, and the rest are in North America and Asia. There are 8,500 employees worldwide, 26 factories, and more than 100 products, including olefins and derivatives such as polyethylene, Polypropylene, polystyrene, nitriles, polyalphaolefins, polybutenes, and gasoline, diesel, heating oil, etc., are among the world's three largest suppliers of polypropylene, high-density polyethylene and acrylonitrile. In addition, there are large refineries in Scotland and France. With 4,000 patents, Econor has proud technology: 65% of the world's acrylonitrile production uses its acrylonitrile catalyst technology; several companies use its Innovene gas-phase manufacturing process of polyethylene and polypropylene, and polystyrene and can be made Polystyrene's Empera and Rigipore processes.
Doing additions to core competencies and doing subtraction in non-core businesses are important means for value discovery and value reengineering. BP is the same, and Yinuo Chemical is also doing the same. In order to adapt to the current market competition environment, it has already sold some non-performing assets, and will also expand through investment. It has already planned to build a factory in Saudi Arabia and shift its attention from North America and Europe to Asia, where raw materials are cheap and market potential is huge.
Yinuo Chemical in China
Like BP, Yinuo Chemical attaches special importance to China's huge market, and has already put its Asian headquarters in Shanghai in one step. Half of the 110 employees in Asia currently have offices in Shanghai. In addition, there are sales agencies in South Korea, Japan and Singapore, and two joint venture plants in Malaysia. Shanghai Secco’s 900,000-ton ethylene plant, which was established in China with Sinopec and Shanghai Petrochemical, has been put into commercial operation at the end of June. It is currently China. The largest ethylene device. Billion Chemical's 2005 goals in China and Asia are: sales of 1.3 million tons, sales of 1.4 billion US dollars.
Meng De, president of Yi Nuo Chemical's China and Asia operations, pointed out that the company’s chemical sales in Asia accounted for 10% of its global sales, higher than similar companies. The Asian market is growing rapidly, and half of the demand comes from China. Taking polyolefins as an example, it is necessary to build a SECCO-scale plant each year to meet the increased demand in the Chinese market. China will become the core of Yi Nuo in Asia.
Yilin Chemical CEO Alexander proposed that we must adapt to this kind of market changes, and we need 10 years to realize the business structure of 1/3 of Europe, 1/3 of North America, and 1/3 of Asia.
Undoubtedly, the new company, Yinuo Chemical, possesses the best quality assets, global production networks, and advanced technologies of its kind. As an independent entity, it will be a powerful competitor. Looking at the splitting and splitting of transnational corporations, the purpose is very clear, that is, something is done. From DuPont's separation of profitable textile businesses in the past two years, to the separation of Bayer from chemical industry to LANXESS, and to the birth of BP's “Thin Weight†and Billion Connaught today, its focus is on: To achieve production factors on a global scale. The rational flow and efficient combination of strong core business. The "separation" move for BP and Yinuo Chemicals is a win-win situation.
Few MNCs have experienced mergers and acquisitions in the history of development. Each acquisition has contributed to the rapid growth of some companies, and each stripping purpose is to make the core competitiveness stronger. Has this step taken by BP been a win-win for BP and the new company Econo, which was born out of BP? Last week, Ralph Alexander, CEO of Yinuo Chemical, and Meng De, President of China and Asia Pacific received an exclusive interview with this reporter in Shanghai.
Why BP splits chemical business
In the 1990s, the cross-border merger of BP and Amoco was widely considered as the largest merger case in the industry at that time. After that, Amoco, Arco, Castrol and many other famous brands were successively received by BP. BP1 Leap became the third largest oil group in the world after ExxonMobil and Shell. The goals that BP has focused on over the years seem to be more focused on upstream oil and gas exploration. Yinuo Chemical CEO Alexander pointed out that in a huge company like BP, oil and natural gas exploration accounted for 90% of its business, and the proportion of downstream chemical business was relatively small, so in the development strategy, BP is difficult for chemical industry. Business gives due attention and energy.
BP's separation of its olefins, polyolefins and nitriles business while retaining the acetic acid and aromatics business with a return rate of nearly 20% means that it must obtain more profits from the upstream core business and chemical products with strong competitive advantages. Therefore, the separation of non-core business is an inevitable choice.
Yi Nuo Chemical stands out
Despite the fact that the chemical company was a huge energy company such as BP, the proportion of its chemical business could not be given enough attention. However, the separated Novartis Chemical has become the top five petrochemical companies in the world due to its annual production of more than 15 million tons of petrochemical products. One of them and ranks among the Fortune 150 companies. If it is difficult to form an independent development strategy for the chemical business when it is in BP, then the isolated Econor Chemical will undoubtedly gain a greater freedom of development and be more competitive. Talking about the new Econol Chemicals, Alexander explained that this is an exciting company.
The biggest difference between Yinuo Chemical and BP, which is separated from BP, is that it will be very cautious in investment strategy and strictly control costs. At the same time, in terms of company operations, the organization is relatively simple and the action is more agile and flexible. Management is also greatly simplified.
Half of the assets of UConn Chemicals, headquartered in Chicago, USA, are located in Europe, and the rest are in North America and Asia. There are 8,500 employees worldwide, 26 factories, and more than 100 products, including olefins and derivatives such as polyethylene, Polypropylene, polystyrene, nitriles, polyalphaolefins, polybutenes, and gasoline, diesel, heating oil, etc., are among the world's three largest suppliers of polypropylene, high-density polyethylene and acrylonitrile. In addition, there are large refineries in Scotland and France. With 4,000 patents, Econor has proud technology: 65% of the world's acrylonitrile production uses its acrylonitrile catalyst technology; several companies use its Innovene gas-phase manufacturing process of polyethylene and polypropylene, and polystyrene and can be made Polystyrene's Empera and Rigipore processes.
Doing additions to core competencies and doing subtraction in non-core businesses are important means for value discovery and value reengineering. BP is the same, and Yinuo Chemical is also doing the same. In order to adapt to the current market competition environment, it has already sold some non-performing assets, and will also expand through investment. It has already planned to build a factory in Saudi Arabia and shift its attention from North America and Europe to Asia, where raw materials are cheap and market potential is huge.
Yinuo Chemical in China
Like BP, Yinuo Chemical attaches special importance to China's huge market, and has already put its Asian headquarters in Shanghai in one step. Half of the 110 employees in Asia currently have offices in Shanghai. In addition, there are sales agencies in South Korea, Japan and Singapore, and two joint venture plants in Malaysia. Shanghai Secco’s 900,000-ton ethylene plant, which was established in China with Sinopec and Shanghai Petrochemical, has been put into commercial operation at the end of June. It is currently China. The largest ethylene device. Billion Chemical's 2005 goals in China and Asia are: sales of 1.3 million tons, sales of 1.4 billion US dollars.
Meng De, president of Yi Nuo Chemical's China and Asia operations, pointed out that the company’s chemical sales in Asia accounted for 10% of its global sales, higher than similar companies. The Asian market is growing rapidly, and half of the demand comes from China. Taking polyolefins as an example, it is necessary to build a SECCO-scale plant each year to meet the increased demand in the Chinese market. China will become the core of Yi Nuo in Asia.
Yilin Chemical CEO Alexander proposed that we must adapt to this kind of market changes, and we need 10 years to realize the business structure of 1/3 of Europe, 1/3 of North America, and 1/3 of Asia.
Undoubtedly, the new company, Yinuo Chemical, possesses the best quality assets, global production networks, and advanced technologies of its kind. As an independent entity, it will be a powerful competitor. Looking at the splitting and splitting of transnational corporations, the purpose is very clear, that is, something is done. From DuPont's separation of profitable textile businesses in the past two years, to the separation of Bayer from chemical industry to LANXESS, and to the birth of BP's “Thin Weight†and Billion Connaught today, its focus is on: To achieve production factors on a global scale. The rational flow and efficient combination of strong core business. The "separation" move for BP and Yinuo Chemicals is a win-win situation.
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