China Market Insider The Top 10 Chemical Companies in China

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The Corona crisis, particularly the lockdowns adopted by many governments, has hit the chemical industry hard in China. However, sales in many of the top companies in China already declined in 2019, even before Corona. But there are exceptions, as the figures from 2019 in our latest top 10 show here.

Beijing/China – Among the 50 largest chemical companies on earth, five are from the People's Republic of China, one more than last year, reports Chinese chemical newspaper Zhongguo Huagong Bao. By comparison, ten are from the U.S., eight from Japan, six from Germany, and four from South Korea.

Here is a brief description of the current top 10 in China:

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1. Sinopec

Sales: 61.3 billion dollars (51.7 billion euros)

249,142 employees

Chief Executive Officer: Zhang Yuzhou

Zhang Yuzhou, an expert in clean coal technologies, has taken charge of this industry's largest state-owned enterprise in China since January 2020, after holding various government posts. "China Petrochemical Corporation (Sinopec Group), with its headquarters in Beijing, is the largest producer of oil and petrochemical products in China. It is also the largest refining company and the third-largest chemical company in the world which adheres to global standards. The entire Sinopec Group ranked second in the Fortune 500 list in 2019.

The company's vast product portfolio includes a wide range of petrochemical products, including synthetic resins, plastic fibers, synthetic monomers and polymers, chemical intermediates of all kinds, synthetic plastics, and chemical fertilizers. In 2019, Sinopec's sales were down 7 %, and the first quarter of 2020 was also difficult for the group due to the nationwide lockdown in China. However, as early as the second quarter, there have been no nationwide lockdowns in China, and its finances have recovered.

2. PetroChina

Sales: 22 billion dollars (19 billion euros)

506,000 employees

Chief Executive Officer: Dai Houliang

Formerly the head of Sinopec, Dai Houliang took the helm at PetroChina in January 2020. PetroChina is the listed arm of China National Petroleum Corporation (CNPC). The company's headquarters are located in Beijing. The corporation is active in producing and processing crude oil and gas, the production and marketing of products made from oil and gas, and the production of petrochemical products of all kinds.

The sites are too numerous to list here. But highlights include the Liaoyang Petrochemical refinery project, one of the seven sites in the group with a capacity of more than ten million tons per year. Ningxia Petrochemical, Karamay Petrochemical, and Jinzhou Petrochemical are other major projects. Fushun Petrochemicals' refinery base (10 million tons per year) and associated ethylene plant (one million tons per year) are also noteworthy.

In 2019, even before the Corona crisis, the group's sales had plunged four percent and profits as much as 56 percent. Completely undeterred, PetroChina is investing in more and more new large-scale plants, including one for the production of ethylene from ethane.

3. Hengli Petrochemical

Sales: 15 billion dollars (13 billion euros)

81,350 employees

Chief Executive Officer: Chen Jianhua

Hengli Petrochemical Co. is based in Dalian on the Chinese coast. The group is active in petroleum refining, petrochemical products, aromatics, PTA, polyester technical yarns, engineering plastics, and many more. The largest plants are located in Suzhou, Dalian, Suqian, Nantong, and Yingkou.

In 2019, Hengli Petrochemical increased its sales by about two-thirds, not through acquisitions or mergers, but by opening proprietary production facilities. For example, a new plant to produce P-xylene from crude oil with an annual capacity of four million metric tons came on stream in 2019. This year, the company is predicted to grow further, with a new ethylene cracker and a new plant to produce pure terephthalic acid (PTA) in the pipeline.

4. Rongsheng Petrochemical

Sales: 13.4 billion dollars (11.3 billion euros)

11,710 employees

Chief Executive Officer: Li Shuirong

Rongsheng Petrochemical Co. is based in Xiaoshan near Hangzhou in China's coastal province of Zhejiang, south of Shanghai. It is one of China's leading private chemical companies and one of the very few that can compete in the league of large state-owned enterprises.

Its chairman, Li Shuirong, born in 1956, is a true ‘self-made man’: in 1989, he founded the company's forerunner, Rongsheng Chemical Fibre Group, with 200,000 Chinese yuan (about 30,832 dollars) from the sale of his timber business and all his private property. The company has been listed on the stock exchange since 2010.

Rongsheng Petrochemical manufactures petrochemical products and especially man-made fibers of all kinds in Ningbo, Dalian, and on the southern island of Hainan, among other places. The company's headquarters are located in the neighborhood of the Chinese ‘textile metropolis.’ Aromatic hydrocarbons, PTA, and PET, are also produced. In PTA, the company is one of the largest producers in the world. In 2019, the first phase of a new ‘green’ composite site with an annual capacity of 40 million tons of crude oil had been put into operation in Zhoushan, Zhejiang.

5. Hengyi Petrochemical

Sales: 11.5 billion dollars (9.7 billion euros)

16,557 employees

Chief Executive: Qiu Yibo

Qiu Yibo, born in 1987, took over the management of Hengyi Petrochemical in January 2020 from his father, Qiu Jianlin, who founded the company. ‘Hengyi Petrochemical Co.’ is based in the Zhejiang Province in Yangtze River estuary delta, a traditional stronghold of China's chemical industry. It is now the world's largest producer of PTA and polyester fibers.

The company has grown into a conglomerate with 35 subsidiaries that have been the market leader in chemical fiber production in China for the past five years. Production capacity is 13.5 million tons per year for PTA, 300,000 tons for CPL. Furthermore, it produces PET chips and every kind of polyester fiber imaginable.

In 2019, sales plummeted by almost ten per cent, but profits nearly doubled. The group is currently investing in new facilities for the production of functional man-made fibers.

6. Syngenta Group

Sales: 10.5 billion dollars (8.9 billion euros)

48,000 employees

Chief Executive Officer: Ning Gaoning, alias Frank Ning

Syngenta has been a Chinese company since it was acquired by ChemChina for about 36 billion euros, only in 2000, from a merger of Novartis and AstraZeneca's agrochemical divisions. The above sales figure is from 2019, but the ongoing consolidation in the agrochemical industry means that the Syngenta Group continues to grow rapidly.

In January 2020, ChemChina merged its related business with Sinochem. Adama in Israel and other businesses have also been placed under the newly formed Syngenta Group. Syngenta Group China alone has 14,000 employees.

From the group's headquarters in Shanghai, the crop protection business is handled by subsidiaries Adama China, Syngenta Crop Protection China, and Yangnong, and the seeds business by subsidiaries China National Seeds, Syngenta Sees China, SinoFert, and Modern Agricultural Platform. Syngenta Group China is the market leader in crop protection and crop nutrition materials in the People's Republic, as well as a leading provider of services, including digital, in the Chinese agricultural sector.

7. Wanhua Chemical

Sales: 9.8 billion dollars (8.3 billion euros)

15,392 employees

Chief Executive Officer: Liao Zengtai

The ‘Wanhua Chemical Group Co.’ was founded in 1998 in Yantai in the Chinese province of Shandong. The group was formerly known as Yantai Wanhua Polyurethane or Yantai Wanhua. The chemical conglomerate is the world's largest producer of MDI (methylene diphenyl diisocyanate) and also the world's largest producer of ADI. In China, Wanhua Chemical is also the market leader in TDI (toluene diisocyanate).

In addition to polyurethane products, the group also produces petrochemical products such as acrylic acid and acrylic ester and related products, as well as fine chemical products such as specialty aqueous adhesives (PUD) and PA emulsions.

Since Wanhua Chemical expanded its MDI business by building large-scale plants, the company's profits have exploded. However, as the global polyurethane market has begun to weaken, expansion plans in the U.S. have been scaled back.

8. Yunnan Yuntianhua

Sales: just under 8.3 billion dollars (7 billion euros)

12,914 employees

Chief Executive Officer: Zhang Wenxue

Located in China's beautiful mountainous province of Yunnan (the ‘Switzerland of China’), this state-owned company was founded in 1997 and focuses on fertilizer production. Production takes place at more than ten different locations, including Yunnan, Chongqing in the Sichuan Province, Inner Mongolia, and now also with the help of offshoots in Southeast Asia and the Middle East.

Synthetic ammonia, urea, pentaerythritol or ‘Penta’ for short, nitramine, sodium formate, and polyformaldehyde are among the product portfolio. Various types of chemical fertilizers, including nitrogenous phosphate fertilizers such as monoammonium phosphate or diammonium phosphate, are an essential part of the business. The production of separators for lithium batteries is also impressive against the background of the new boom in Chinese e-mobility, at least for the moment.

9. Sinochem International Corporation

Sales: 8 billion dollars (6.8 billion euros)

18,955 employees

Chief Executive Officer: Liu Hongsheng

The general manager (GM) and party secretary of Sinochem International, Liu Hongsheng, holds a master's degree in philosophy from the prestigious Peking University, but since 2000 he has worked his way around various business units of the company including the department store and logistics divisions.

Controlled by the Sinochem Group but independently listed in Shanghai, the state-owned Sinochem International exports its products to more than 100 countries around the world. These include agrochemical products, chemical intermediates, new materials, and polymer additives.

As early as 2001, the company moved its headquarters from Beijing to the Pudong district of Shanghai in order to be closer to important customers and suppliers in the petrochemical industry.

The strategic approach of ‘China Inc,’ which is centrally controlled by the Communist Party in Beijing, in building a modern petrochemical and chemical industry can be seen in the group's recent moves. Sinochem International recently announced that it would acquire 39.88 % of the shares in Jiangsu Yangnong Chemical Group from Syngenta. Following the integration of relevant businesses, Sinochem will focus on fine chemicals, such as the development of new chemical materials and chemical intermediates, while Syngenta Group will focus even more on its core business in seeds and agriculture.

10. Tongkun Group

Sales: 7.7 billion dollars (6.5 billion euros)

15,325 employees

Chief Executive Officer: Chen Shiliang

The ‘Tongkun Group Co.’ is based in the small Chinese town of Tongxiang with a population of around 800,000 in the north of the coastal province of Zhejiang. Its core business is chemical fiber production. Somewhere, the group acquired the nickname ‘Walmart of polyester textile filaments.’ With their production, they are number one in the world.

But the Tongkun Group, with its production base in Jiaxing, has also skillfully invested in various facilities throughout the textile industry value chain, from refining and PTA to polyester spinning and texturing.

The Tongkun Group has just invested around 7.8 billion dollars (6.6 billion euros) in new production facilities in Qinzhou in China's southwestern province of Guangxi, where 600,000 tons of styrene, 2.8 million tons of aromatics, and five million tons of PTA will be produced per year in the future. A new project of the busy Chinese chemical company is also being built in Shuyang, Jiangsu Province.

* Henrik Bork, former China correspondent of the German Süddeutsche Zeitung and the Frankfurter Rundschau, is Managing Director at Asia Waypoint, a Beijing-based consulting agency. ‘China Market Insider’ is a joint project of the Vogel Communications Group, Würzburg, and Jigong Vogel Media Advertising in Beijing.

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