How do multinational chemical giants invest in Chinese market?

wallpapers Industry 2020-12-09
The time when

only welcomed them with flowers and red carpet is gone forever. For their words, the two most likely mistakes are: high pressure, refusal to localize; striving for success and excessive localization.

China's chemical industry has surpassed the United States and leapt to the first place in the world. When is it? 2010! The Chinese market of

and

undoubtedly has a fatal attraction. For global chemical giants such as BASF, Bayer, NVIDIA, Lucent and Prax, it seems that this market will always have the imagination space of boundless.

has been accompanied by the high growth of China's petroleum and chemical industry for more than 30 years. It is the process of multinational chemical enterprises from simply exporting products to establishing offices, building workshops, establishing sole proprietorship and joint ventures, and then to the localization of the system. Together with many Chinese partners, they have promoted the sustainable development and prosperity of the entire chemical industry. However, in 10, 20, or even 30 years, have multinational chemical enterprises really "understood" China? The real answer is obviously between yes and No. The only certainty is always "change.". The days when chemical giants were welcomed with flowers, champagne and red carpet are surely gone.

and

can not describe the mentality of multinational chemical enterprises in China more accurately than "crossing the river by feeling the stones". However, Chinese enterprises have to feel the stone to cross the river, and it is difficult for foreign enterprises to go beyond this stage. Moreover - for more than 30 years, many enterprises have rolled into the river without touching stones. The industrial process of

and

may be rapid, and the changes in policies, partners, competitors and technical level may also dazzle people. Sometimes, multinational chemical enterprises can't understand the Chinese market. Standard Porter's five forces analysis and Boston matrix can't match Sun Tzu's art of war and traditional wisdom. Even if they are good at reading the speeches of Chinese leaders and are familiar with "Chinese characteristics", the pressure and risks faced by some chemical giants are obviously no less than the expectations brought by opportunities. Juan Antonio Fernandez, Professor of

and

, has long studied the business environment in China. In his book guanxi, he compares that there is often a certain degree of disconnection between multinational companies and their Chinese partners (officials, clients and buyers). Just like a pair of dance partners, male partners always want to dance too fast, while female partners are cautious. For multinational companies, it is a difficult lesson to keep pace with China's business environment - for some multinational chemical enterprises No exception.

and

, what are the opportunities and risks faced by the chemical giants who have been deeply rooted in China's local market and gained competitive position here in the face of the new normal, new policies, new environment and new competitors? In this regard, PetroChina [- 0.16% funding research report] and the Chemical Industry Federation did a survey. They fully communicated with more than ten senior executives of multinational companies such as BASF, Dow and Bayer, and obtained valuable first-hand information.

Although the strategy, market and investment strategy of different enterprises are very different, there are obvious similarities in their opinions and judgments. Generally speaking, it can be summed up as follows: the importance of China's market is beyond doubt. The investment in the most Chinese market in the future will basically remain at a fairly level, but the worries about overcapacity in the industry are increasing; energy demand, water resources and urbanization We should pay more attention to cost control, profitability, value growth and R & D market orientation; we are full of expectation for the market-oriented reform in the chemical industry, and we are eager for a more fair and free market environment.

now, let's take a look at the real thoughts and judgments of senior executives of multinational giants:

,

1. Qian Mingcheng, President of Greater China region of Lansheng chemical, in general, there is no future for innovation that does not adapt to the market, and the two must be closely related. Historical experience has proved that even if good products are developed, they will be eliminated without the support of market demand. "

and

are based on Lansheng's core business. We believe that the future global development will face four major trends: Green motorization, urbanization, clean water demand and sustainable development of agriculture. Lansheng is particularly optimistic about motorization and urbanization.

and

in the last 30 years of reform and opening up, the industry must be transformed and upgraded to adapt to the future challenges. Transformation is a painful process. In the process of transformation, the requirements for safety, environmental protection and health are constantly improving, which is a course of great waves scouring sand. The transformation and upgrading of the industry needs the cooperation of the government, industry, association and other relevant stakeholders, and social stability and other important aspects should be considered.

and

Langsheng suggested that in order to achieve long-term development, it is very important to create a long-term stable and clear policy environment. For example, the current trend of China's environmental protection policy is undoubtedly correct, but the stability is not enough, the policies of different provinces and cities are not clear, and different projects may face different treatment methods. In addition, due to the replacement of local ruling leadership, the policy coherence is insufficient. We believe that with the deepening of reform, these will be further improved. For chemical enterprises,

and

are under great pressure from raw materials. To some extent, raw materials and markets determine investment. For China, raw material supply is a short board, and market demand is an advantage. In the future, Lansheng is concerned about the degree of policy openness, and mixed ownership will be one of the focuses. It is expected that the supply of raw materials in the future will be more market-oriented than it is now. Looking back on the past, when Langson chemical's business was separated from Bayer in 2004, its assets in the Asia Pacific region were only 5%, and by 2015, the number will reach 35%.

2. It is impossible for Bayer to ignore the existence of various challenges. For example, the short-term overcapacity phenomenon can be understood, and the long-term overcapacity will bring big problems. "

,

population growth, urbanization deepening, motorization and population structure change will be the four major trends that chemical industry will inevitably face in the future.

and

are in the Chinese market. In the past 15 years, Bayer is in the construction stage, mainly engaged in human and material resources
TRUNNANO (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals and Nanomaterials. The nitride powder produced by our company has high purity, fine particle size and impurity content. Please contact us if necessary.