Report on the Economic Evaluation of the Basic Chemical
Raw Material Manufacturing Sector in China in 2006

By CPCIA   

  1    Overall evaluation of the basic chemical raw material
manufacturing sector in China in 2006

The basic chemical raw material manufacturing sector developed
rapidly in 2006. According to the analysis of data provided by
the National Bureau of Statistics, there were 4 628 enterprises
with a considerable scale in the sector. The industrial total
output value was RMB569.756 billion, an increase of 44.39% over
RMB394.602 billion in the previous year. The sales revenue was
RMB568.167 billion, an increase of 46.08% over RMB388.951
billion in 2005. The asset value was RMB545.388 billion, an
increase of 34.69% over RMB404.919 billion in 2005. The total
profit was RMB24.055 billion, an increase of 72.62% over
RMB13.935 billion in 2005.
   Judging from the analysis of statistical data in previous
years, the industrial total production value and the sales
revenue of the basic chemical raw material manufacturing sector
in China have been grown synchronously. The growth in 2005 and
2006 was rather fast. After a period of rapid growth from 2001
and 2002, the growth of the asset value was slowed down from 2003
to 2006. The total profit grew stably from 2000 to 2003 and
entered a period of rapid growth from the second half of 2003
to 2004. With the impact from various factors such as
supply/demand and price, the economic performance of the sector
had an evident downslide in 2005. A high growth was achieved once
again in 2006.

  2     Top 100 enterprises of the sector in 2006

    (1) Main economic indexes

All main economic indexes in top 100 enterprises in the sector
grew drastically in 2006. The index with the highest growth was
the total profit. The total profit accomplished in the year was
RMB11.432 billion, an increase of 37.80% over RMB8.296 billion
in 2005. The sales revenue was RMB296.499 billion, an increase
of 32.40% over 223.944 billion in 2005. The asset value was
RMB316.743 billion, an increase of 30.95% over RMB241.478
billion in 2005. The industrial total production value was
RMB286.540 billion, an increase of 33.28% over RMB214.991
billion in 2005.
   The total asset value of top 100 enterprises in the sector
accounted for 60.85% in the entire basic chemical raw material
manufacturing sector in 2006. The sales revenue accounted for
53.83%. The industrial total production value accounted for
50.29%. The total profit accounted for 47.83%. It is therefore
an inevitable choice for the sustained and rapid development of
the basic chemical raw material manufacturing sector to
highlight the development of top 100 enterprises, accelerate the
structural readjustment of the entire sector, employ advantages
of large enterprises in capital and technology and achieve scale
effect.

    (2) Scale analysis

In top 100 enterprises in this sector in 2006, there were 38
large-scale enterprises and their asset value was RMB176.332
billion, accounting for 56% of the total sector. There were 42
medium-scale enterprises and their asset value amounted to
RMB78.967 billion, accounting for 25%. There were 20 small-scale
enterprises and their asset value totaled RMB61.444 billion,
accounting for 19%. It can be seen from these proportions that
the basic chemical raw material manufacturing sector in China
has acquired satisfactory concentrated operation and formed
considerable scale effect. Such a structure is especially
favorable to the execution of technical renovation, the increase
of productivity and the control of environmental pollution.

    (3) Regional distribution

The regional distribution of top 100 enterprises was rather
concentrated. Most of them were located in the eastern region.
Regarding top 100 enterprises in terms of sales revenue, Jiangsu
province held the first place and the sales revenue accounted
for 34.14% of the top 100 in the sector. Jilin province held the
second place and the sales revenue accounted for 16.20%.
Shanghai held the third place and the sales revenue accounted
for 9.07%.

    (4) Ownership analysis

Among top 100 enterprises, state-owned and state-controlled
enterprises held the first place and their sales revenue was
RMB247.130 billion, accounting for 83.35% of the total sector.
Collective enterprises held the second place and their sales
revenue was RMB23.290 billion, accounting for 7.85%.
Foreign-funded enterprises held the third place and their sales
revenue was RMB16.219 billion, accounting for 5.47%. Private
enterprises held the fourth place and their sales revenue was
RMB9.861 billion, accounting for 3.33%.

    (5) Performance evaluation

The rate of profit/sales in top 100 enterprises was 3.86%, being
0.48 percentage points lower than 4.34% in the entire basic
chemical raw material manufacturing sector. The rate of
profit/asset was 3.61%, being 0.98 percentage points lower than
4.59% in the total sector. The per-capita profit created was
RMB40 700, being RMB12 400 higher than RMB28 300 in the total
sector.

  3   Comprehensive evaluation

The basic chemical raw material manufacturing sector in China
still maintained a rapid development in 2006, but the growth
tended to be slower than 2005. The brisk demand of chemicals in
domestic and global markets promoted the rapid development of
the basic chemical raw material manufacturing sector. The
sustained depreciation of U. S. dollars led to a drastic price
rise of many important chemical raw materials priced in U. S.
dollars and brought about a considerable price rise of basic
chemical raw materials. Besides, industrial upgrading,
technical renovation and structural reformation also greatly
increased the productivity of the sector. The macro control
exercised by the state also exerted much influence on the
development of the basic chemical raw material manufacturing
sector.