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Sino-Linchem: Grow up with the Geographical Superiority

From : Sino-Linchem Group       Date : 2009-03-14   Hits :  

The Predecessor of Sino-Linchem Co., Ltd is a trade company which is engaging phosphoric acid trade. In the Qinzhou port industrial zone, we invested and found phosphoric chemical industry Production enterprise, already developed into the subordinate to have 7 enterprise's Group at present, two of them are foreign enterprises. And it has constructed the phosphorus chemical industry zone in the Fangcheng port and bought in more than 30 enterprises.

Chinese phosphorus ore reserves occupy the third in the world, but the yield and the process load occupy the first in the world. The Chinese phosphorus ore resources mainly distribute in three provinces of Yunnan, Guizhou and Sichuan. Guangxi namely does not have the phosphorus ore resources, also does not have the big market, but in the phosphorus chemical industry garden, the sales volume of the phosphorus product of chemical industry that enterprise produces actually occupies half of our country’s market. Under no phosphorus ore resources condition, how can Guangxi attract so many phosphorus chemical industry enterprises?

Firstly, “the geographical superiority” promoted the phosphorus chemical industry to rise.

The “position” and “resources” the fit and unfit quality compare, oversea chemical Chairman Lin Ming has his original opinion: He thought that “the geographical superiority” is important, under some special conditions, “the geographical superiority” is the increment, but “the resources superiority” is the depreciation. So-called “resources superiority” depreciation, because: When first, resources mining area geographical position, often lacks the technology, the scientific research personnel, will take seriously to mine excessively despises the depth processing, in other words, the talented person and the enterprise will not be willing take root nearby the enterprise ,which in the backward mining area . When the resources as the primary product, its value is lower, it must keep prices down by the intensive processing enterprise; Second, the resources only then turn the market to need the product to be able to rise in value, namely only then turned the phosphorus ore or the phosphorization primary product each kind of chemical fertilizer raw material which, the fine product of chemical industry the market most needs, when has promoted the product value added the resources superiority can transform as the market superiority. So-called “geographical superiority” the increment, is refers to the geographical position to be superior, the talented person gathers, the technology to be developed, information quickly, good communications, each related resources Processing industry namely close produce market, also approaches the resources habitat. Has the geographical superiority place to be possible to use its superiority characteristic, becomes the market the resources intensive processing to need the product, enhances the resources value. But he concluded that Jiangsu's phosphorus chemical industry will be difficult to sustain, because: (1) China has 13,000,000,000 ton phosphate rock reserves, the country started strictly to protect, the export tax enhanced largely, has increased the enterprise products outlet cost. (2) Jiangsu phosphorus chemical industry enterprise's producers' goods yellow phosphorus from the Yunnan and Kweichow Sichuan, but phosphorizes the product mainly to sell to Southeast Asia market, transports to Jiangsu raw material from the Yunnan and Kweichow Sichuan, the marine transportation product arrives at Southeast Asia again, has circled one greatly curved, is far away, the physical distribution cost is very only high. (3) the Jiangsu locality's land cost, the labor force cost, the transportation cost are rising unceasingly, the competitive advantage will certainly to drop gradually. (4) already verified Morocco's phosphorus reserve to account for world 32%, other phosphorus ore may supply the export the major country and the area also have west Sahara, South Africa, Syria and Russia. When the phosphorus ore needs from the overseas import, the phosphorus chemical industry enterprise must approa Therefore 4 years ago he boldly makes the predict that will judge China's phosphorization industry to present the eastern industry the tendency which will shift to the west, will stop over coastal area and so on Guangxi particularly against city in the phosphorus chemical industry's shift and Qinzhou opportunities is biggest. ch has the geographical superiority harbor. How to grasp this superiority, promotes the phosphorization Processing industry to settle down in the Qin against harbor area vigorously? Chairman Lin Ming thought that one must form the certain scale the first phosphorus chemical industry, takes outside the industrial model attraction area the enterprise; Two must make a nest to attract a phoenix. Therefore he sped up in Qinzhou and the Fangchenggang phosphorization Processing industry as well as the industrial park development. In recent years, the phosphorization product in the Guangxi Qinzhou, the Fangchenggang area vigorous development and the overseas some phosphorization company and Jiangsu area's some enterprises shifted the factory to Guangxi's fact, has proven his judgment in advance. At present the Guangxi enterprise phosphoric acid volume of exports has occupied the national volume of exports above 50%.

2. Phosphoric Chemical Industry Cluster Consisting of Industrial Park

Since more than ten years ago, Sino-Linchem has realized from the competition of phosphoric market that the integration of mine, industry and trade regarding phosphoric industry can benefit more than phosphoric trade only. For the demand of gradual expansion of the business scope, they’ve carried out a strategy of industrial integration since 2000. The forward integration extent their industrial chain to the control over natural resources, and 2 phosphorous mine enterprises in places of resource in Yunnan, Guizhou and Sichuan were under control by indirect share-holding or purchase. The current global deposit of phosphorous mine explored will be consumed in 50-100 years from now on. We cannot produce food provisions without phosphorous. We cannot develop without natural resources. The backward integration extent the processing industry gradually to 2nd and 3rd level of phosphoric chemical processing, thus prolonged the industrial chain, realized the integration of whole production and formed a comparatively perfect system of phosphoric chemical industrial chain. The extension of industrial chain formed scale economy and gained apparent beneficial result. It’s reported that the phosphate rock rose by 7 times in the price in just 14 months from April 2007, from which Sino-Linchem benefits a lot.

In the background of Guangxi Beibu Bay Economic Zone listed in State Economic Development Strategy, Sino-Linchem took aim at the historic opportunity of economic development in Beibu Bay and took advantage of the overall arrangement focusing on chemical industry development as adopted by Beibu Bay Economic Zone to have organized the establishment of Guangxi Phos-Chem Industry Society and became chairman of the society with the strong support of relevant governmental administration. On one hand, Sino-Linchem can associate other enterprises as a group to purchase the raw materials and make the raw material basis in Yunnan, Guizhou and Sichuan become the raw material basis for their society, which forms a reactive effect for purchase. Thus assures the stability of raw material supply as well as further take control over the purchase price. On the other hand, Sino-Linchem can associate other member enterprises to jointly develop overseas market, thus further broadens their shares in market as well as hold tight the market initiative.

As Sino-Linchem promote social enterprises for joint development, they also planned and built a Phos-Chem Industry Park with an area of 2,000 acreages located Gongche Town, Fangcheng Port with the support of local government in 2007. There have been more than 30 enterprises located in the park until now, which formed a basic model of scale economy. The social industry park set New Space, Distributing Center & Weather Forecast as its target slogan. New Space: Although there are little natural resources in Guangxi, but we can create a new space by our regional advantage. Distributing Center: Domestic Phos-Chem enterprises in East China as well as overseas enterprises have moved to the Park gradually. Weather Forecast: The Park’s Phos-Chem output will share a majority over China and have an influence on the local price throughout the country.

Sino-Linchem structured a seaside Phos-Chem Industry Cluster in Guangxi with joint efforts from various parties. They also develop quickly when they promote social enterprises for joint development, thus become the leading enterprise in the industry cluster of Fangcheng Port Phos-Chem Industry Park.

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