Top 100 of China's Petroleum and Chemical Industry

By CPCIA
According to the statistic report of the National Bureau of
Statistics of China, there are 24 159 scaled companies (all
state-owned companies, and non-state-owned companies those have
achieved a main business revenue of over RMB5 million for the
fiscal 2005) nationwide majored in petroleum and chemical
industry in 2006. Top 100 companies are indexed by their 2006
revenue in main business.
   In 2006 the central government continued to practice stable
financial policies and money policies as well as moderate macro
adjusting measures that included encourage and control at same
time, so China's domestic economy developed rapidly and well.
The petroleum and chemical industry, promoted by brisk economy,
posted an excellent performance. The economic performance of the
top 100 companies is better than that of 2005 top 100 companies.
The cumulative indexes of the top 100 companies, such as total
asset, industrial production value counting on present currency,
sales revenue and profit, increased dramatically compared with
2005.
   All of the 24 159 companies of 2006 has a total assets of
RMB3217.434 billion, representing an increase of 19.93%
compared with RMB2682.707 billion in 2005. The total industrial
production value increased 26.68% to RMB4260.189 billion from
RMB3363.085 billion in 2005. The total sales revenue was
RMB4202.874 billion, increasing 27.41%. The total profit
achieved was RMB437.741 billion, compared with RMB370.169
billion in 2005.
   The top 100 companies held the most important position in
China's petroleum and chemical industry, with a nearly 75% of
dedicating ratio in economic profit. The top 100 companies of
2006 registered a total asset of RMB3032.073 billion, accounting
for 94.24% of the whole industry. The portion of total industrial
production value of the top 100 was 58.91%. Their total sales
revenue reached RMB2774.952 billion, representing a share of
66.03%. The top 100 recorded a total profit of RMB332.29 billion,
amounting to 75.91% of the industrial total.

A. The ownership type of the top 100

Among the top 100 companies, 44 are state-owned (wholly
state-owned and state-owned share holding) enterprises, with a
total sales revenue of RMB2517.574 billion and a total profit
of RMB320.157 billion, accounting for 90.72% and 96.35% of the
top 100 respectively. Collective (held by local government or
other diversified share holders) enterprises occupied 31
positions in the top 100, with a total sales revenue of
RMB143.503 billion and a profit of RMB8.123 billion, or 5.17%
and 2.44% respectively in the total of the top 100. Private owned
companies contributed 0.95% to the total sales revenue of the
top 100, or RMB26.255 billion. Foreign funded companies in the
top 100 recorded sales revenue of RMB87.62 billion and a profit
of RMB3.006 billion, or a portion of 3.16% and 0.9% respectively.
   Typically the initial investment for petrochemical companies
is huge. The reasons for central government to set up
petrochemical giants, such as CNPC and Sinopec Group, are that
the larger the scale of petrochemical company is, the easier the
company achieves scale advantages, reduces cost, increases
production rate and makes more profit.

B. Scale

Large scale companies in the top 100 contributed to the major
in sales revenue and made the most profit. The first 62 companies
in the top 100 created sales revenue of RMB2601.373 billion and
recorded a profit of RMB325.735 billion, accounting for 93.74%
and 98.03% respectively of the total.
   In petroleum and chemical industry with high integration,
large scale companies can have significant priority compared
with small scale ones. More profit means, in a certain extent,
more pollution on environment, therefore improving technology
to reduce pollution is necessary to be done for a company in this
industry. Large scale companies, typically with stronger
technology priority and more money, can achieve scale effect so
that they can effectively enhance productivity and operation
efficiency and dominates small scale companies in protecting
environment and controlling pollution.


C. Economic performance

Three indexes such as revenue profit rate (profit/sales revenue),
asset profit rate (profit/net asset) and profit per capita are
often used to express the economic performance of a company. The
revenue profit rate of the top 100 in 2006 was 11.97%, compared
with 13.36% of the top 100 in 2005. The asset profit rate of the
top 100 in 2006 was averaged at 10.96%, compared with 12.11% in
2005. The profit per capita of the top 100 in 2006 reached
RMB146.7 thousand, compared with RMB133.7 thousand in 2005. The
employment of the top 100 in 2006 was 2.2656 million, compared
with 2.2099 million of the top 100 in 2005. The forgoing claims
show that the proportion of fund is increased. The increasing
rate of technology inputting is higher than the growth rate of
employment for the top 100 companies because several giants are
cutting down employment. The improvement of technology promotes
the increased profit but reduces the employment of average fund,
while the cost in fund increases rapidly.
    
D. Compared with competitors worldwide

In 2006 the top 500 worldwide included 70 petroleum and chemical
companies with total sales revenue of US$3569.58 billion. Among
the top 500, Sinopec Group ranked the 23rd, CNPC ranked 39th and
Sinochem ranked 304th. Compared with ExxonMobile, the largest
company in petroleum and chemical industry, the sales revenue
of Sinopec and CNPC was equal to 29.11% and 24.62% respectively
of ExxonMobile. In the aspects of technologies, economic
performance and innovation ability, China's companies lag
behind more.
Rank    Company                     BN RMB
1    China Petrochemical Corporation (Sinopec Group)    1064.160
2    China National Petroleum Corporation (CNPC)     806.144
3    Sinochem Corporation    182.754
4    China National Offshore Oil Corporation (CNOOC)    120.823
5    China National Chemical Corporation (ChemChina)    72.763
6    Shaanxi Yanchang Petroleum (Group) Company Ltd.    38.401
7    Shanghai Huayi (Group) Company                  33.869
8    Tianjin Bohai Chemical Industry Group            25.410
9    CNOOC Shell Petrochemicals Company Ltd.         16.535
10    Shandong Befar Group Company Ltd.               11.778
11    Giti Tire (China) Investment Company Ltd.          11.113
12    Shandong Chengshan Group Company Ltd.           10.036
13    Hangzhou Rubber (Group)    &n