NFC: Sino-Mongolian Model Projects Lead to Mutual Benefits

Company Profile
Since the establishment of China Nonferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd. (NFC in short) in 1983 upon the approval by the State Council, NFC has committed itself to project contracting and nonferrous metal resources exploitation in global market for years. Four segments are formed: resources development, international project contracting, equipment manufacturing and trade & others. On Apr. 16, 1997, NFC was recapitalized and allocated quality resources to establish NFC and latter it went public at Shenzhen Stock Exchange. NFC has been elected by The Engineering News-Record magazine as one of the top 225 contractors and 200 design companies for consecutive years. In 2008, it was selected in the first group of CCCMB large-scale full set equipment AAA credit level enterprises and international contracting project AAA credit level enterprises. It was listed in the annual top 100 listed companies in terms of value. In addition, it was listed as one of the 100 model stocks at Shenzhen Stock Exchange. It was awarded three other awards among listed companies for its rapid development. In 2008, it was listed among the top 20 most competitive enterprises in China (rank the 16th).
Challenges
In 1998, NFC established TSAIRT MINERAL Co., Ltd. in Mongolia. In 2005, NFC utilized “project for resources” model to develop a zinc mine in Mongolia and built up the NFC’s first resource base overseas. During its going global process, it is a major problem for the NFC to fit in the politic, economic, cultural and social environment, develop in an appropriate manner, deal with stakeholders properly, develop model projects for Sino-Mongolian cooperation and set up a responsible corporate image for Chinese enterprises.
Solution
NFC sticks to the principle of “mutual cooperation, contributions to shareholders and society, care for employees and environment”, performs its social responsibility and pursues mutual benefits with stakeholders during its implementation of “going global” strategy.
1. Compliance to law. In the development, production, and operation of the zinc mine, NFC abided by rules and regulations, followed the important instructions from the then President Hu Jintao, and strived to build the zinc mine into a model project of Sino-Mongolian cooperation. In this way, NFC established a good corporate image for Chinese enterprises, created sound external environment for corporate management and made sure every work went on smoothly.
2. Regulatory management for model effects. NFC established detailed rules and regulations, job responsibilities and operational regulations and made continuous improvement and supplements among various production departments, positions and administrative management departments. It also required Chinese employees to abide by laws, set good examples and teach shepherds to become qualified employees.
3. People-oriented harmony. NFC made efforts to improve the livelihood of employees at the zinc mine, set up vegetable greenhouse to supply the employee cafeteria. In addition, it built the water screening house and the fluorine was kept below the standard limits; it set up cultural and sports activity center to meet the living requirements of Mongolian employees. Every year NFC arranged two annual leaves for employees to reunite with families. Moreover, NFC encouraged employees to learn Chinese and Mongolian from each other to strengthen the cultural communication. The senior cadre led delegates to celebrate festivals with employees from both countries and bring their best wishes to the employees, which has fully demonstrated the people-oriented corporate culture.
4. Better environmental protection for a better corporate image. NFC has always regarded environmental protection as a major issue in its CSR fulfillment overseas, and correctly recognized internal connection between environmental protection, operational environment and long-term safety. Every year NFC invests in environmental protection of the zinc mine, plants trees in factories, water source, etc. to turn the zinc mine into a garden-like mine. Furthermore, NFC reclaimed land in the mining area. The mine hired experts from Ulan Bator to evaluate the water source conditions to reassure the public, which has won the recognition from local government and the public and set up a good corporate image for Chinese enterprises.
5. Engagement in community development. NFC conducted close cooperation with local government and solved lots of urgent issues, such as building transportation roads, government square, united garden and kindergarten, donating medical equipment to improve medical conditions, and helping undergraduates to finish school, etc.
6. Localized management and long-term perspective. NFC implemented localized management in the zinc mine, trained and recruited local employees. Currently local employees take up 87% of all the employees, and over 30% of the middle management positions hire local employees. Up till now, 2 Mongolian shareholders has been in the senior management. On the localized management basis, NFC explored the localized development for the company, continued to find and summarize cultural differences, agreed to disagree and integrated the culture together, which set a solid foundation for the long-term development of NFC.
Achievements
NFC won recognition and support from local government and community due to its relentless efforts. It created sound external environment for enterprises, laid a solid foundation for the long-term development and achieved the win-win benefits between NFC and society. The zinc mine has become one of the most successful cases of Chinese enterprises investing overseas. From the national perspective, the zinc mine is the model of Sino-Mongolian cooperation while from the enterprise perspective, it is the pride of NFC’s going global strategy.
As of December, 2010, the zinc mine has produced 309,000 tons of zinc, achieved the sales revenue of 412 million dollars and paid taxes of 71.49 million dollars. As the top ten competitive enterprises in Mongolia, TSAIRT MINERAL Co., Ltd. has received over 50 awards from Mongolian government and become the important force to boost Mongolian economy. As a result, NFC promoted the peace, prosperity and stability of Mongolia, and won good reputation for NFC and even China’s nonferrous industry.
Prospect
Only being prepared for danger in times of safety could lead to the long-term development and safety of a company. NFC will stick to the concepts of mutual development and win-win resolution. And NFC will actively deal with various uncertain factors, continue to build Sino-Mongolian model project and shoulder its responsibilities.