Sinochem International Corporation：Rooted in Africa to be a model corporate citizen

Sinochem International Corporation (Sinochem International for short) is a large state-owned holding company engaging in industrial investment, logistics, trading and distribution in the fields of natural rubber, fine chemicals, agrochemicals, chemical logistics, chemical distribution, and other sub-sectors international chemical business(stock code:600500), with customers from over 100 countries and regions worldwide. In 2014, Sinochem International’s business earnings reached 38.6billion CNY, and its total assets exceeded 30.1 billion CNY.
Adhering to the strategy of “Internationalization rooted in the native land”, under the strategic mission of “Grow Sinochem International’s chemical business to be a world-class major force of its industry”, and centering around its core business, Sinochem International unswervingly expands upstream and downstream in its industry, wins over more domestic and overseas markets, and strengthens its organizing and service ability for resources and market of its core business, so as to grow to be an excellent company capable of creating innovative value for chemical industry with its technologies, brands and services.
Challenges
China is a large import and consumption country of natural rubber. In 2012, China’s natural rubber consumption reached around 4,156,000 tons, while the yield was only 856,000 tons. In other words, the ratio of import dependence reached up to 79%. For agricultural projects, one of the key elements to success is how to take root in the local, to cultivate intensively, and to maintain a sustainable development.
Solutions
Co-developing with the local economy
Carrying out the business development mode of “internationalization rooted in the native land”, Sinochem International has long-term development in mind, implements industrial investments, and insists on the principle of win-win cooperation to promote the local economy. Adhering to the strategy of strategic investment and win-win cooperation, the company has achieved holdings of GMG, an internationally renowned natural rubber company, and took it as an investment platform to develop natural rubber planting and processing business in Africa.
Sinochem International’s investment in Africa belongs to strategic investment and is mainly based on “two insists”, that is, insisting on the industrial investment and long-term development. In the field of natural rubber planting, the company further deepens the cooperation with the Cameroonian government, and opens up another two pieces of land for rubber planting, besides the already possessed HEVECAM plantation which has an area of 40,000 hectares. In 2012, a working team was dispatched to plant natural rubber in the reclaimed land. In terms of natural rubber processing, the company dedicates first to increasing the productive capacity of the rubber processing plants it already has through optimizing procedures and taping the potential, and then seeks opportunities to merge and build new rubber processing plants unremittingly.
In 2011, the company purchased a rubber processing plant with a design capacity of 20,000 tons in Ivory Coast. Meanwhile, it signed an agreement with local partners, planning to build a rubber processing plant with a design capacity of 60,000 jointly. Sinochem International’s rubber planting and processing in Africa are flying wing to wing, which builds a solid foundation for the upstream natural rubber industry.
Sinochem International makes great efforts to promote employment and realize common prosperity. The company’s natural rubber plantations and processing plants are not only major sources of revenue for the invested countries, but also provide many jobs for the local labor force, thus guaranteeing the local employment. At the same time, the company provides farmers in the vicinity with seedling growing and planting techniques, which encourages the small farmers to plant natural rubber and palm oil to realize common prosperity.
Co-building with the local communities
The company pays close attention to people’s livelihood and strives to enhance in-depth communication. Before the implementation of all projects, the staff of Sinochem International will go to the area where the projects settle and communicate with the local villagers and the grass-roots government officials to identify their needs and seek their opinions towards the projects. It has become an indispensable part of investment to take local people’s livelihood development into the consideration of the project investment plan.
The company also intensifies work on community co-building and promotes people to live a civilized life. For the projects in operation, the company adheres to the simultaneous development of people’s livelihood and its own business. A series of important measures have been taken, including providing jobs for the local labor force so as to help local people solve the problems of employment and food and clothing and to lead them to the way of wealth; building high quality houses for villagers nearby to help local people solve the accommodation problem, building hospitals in the local and providing basic medical systems to further improve their living standard; launching schools and churches in communities and creating educational bases for local children to impart them social and scientific knowledge.
At the same time, these measures help to cultivate talents for the company’s future development. Supplying water and electric power for communities, building fruits and vegetable demonstration bases, and teaching local residents to plant upland rice and fine fruits and vegetables from China, all greatly enrich the dining table of the local people and optimize the necessary conditions for a civilized life gradually.
Co-existing with the local environment
Sinochem International has built a green circular economy system specific to the natural rubber planting business. The company has signed agreements with WWF and the National Park of Cameroon, and established primeval forest protection areas to maintain the balance of forest ecosystem in the plantation. Apart from this, the company adjusts measures to local conditions and develops a biological cycle mechanism adaptable to the plantation, like using the waste of palm oil processing to produce fodder for livestock or burning it to collect thermal energy, collecting the waste wood in the plantation and reusing it as organic fertilizer, and popularizing advanced waste water processing methods in the plantation.
Achievements
Social Benefits
The local livelihood and environment have been improved. The hearty input and operation of Sinochem International in overseas projects have greatly improved the local livelihood and environment. The building of harmonious communities has already become a good model for Chinese enterprises’ sustainable development in Africa and won respect and support from the local government and people.
Economic Benefits
The company’s industrial status has been enhanced. By implementing the strategy of “going out”, the company has transformed and upgraded from a simple trading company to a whole industrial chain company, which integrates natural rubber planting, processing and distribution services. Correspondingly, the company’s industrial status is greatly enhanced and it has become an important force in guaranteeing our nation’s natural rubber strategic resources. It ranks first in China and third in the world in terms of core competence, as a natural rubber resource industrial service provider.
The company has built a good image for Chinese enterprises. At present, most Chinese enterprises realize “going out” through project contracting and mineral exploitation. However, this mode is weak in sustainability and has a limited feedback to the countries in which the companies settle. Sinochem International’s large-scale and long-term investment in Africa has formed a solid preferential relationship with the local government, partners and cooperators. This mode has been approved by the embassy, the office of commercial counselor and related departments of the Ministry of Commerce and the Ministry of Agriculture.
Prospect
In the future, Sinochem International will further enhance communication with African stakeholders and continue to hold a responsible attitude towards environment and the public to integrate commercial practices with social values and to co-exist with the local environment. It will also continue to promote the economic development of the areas where the projects locate, strengthen the protection of the local natural environment, commit to social and public welfare undertakings, and improve local residents’ living quality and standard further so as to realize the strategic goal of “internationalization rooted in the native land”. Through plowing deep in the fertile land of Africa, the company aims to realize multi-win with the stakeholders and then to realize the goal of a sustainable common development.