On the Rise of Jiujiang Petrochemical

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April 1, 2017, April Fools’ Day. On the afternoon and evening of April 1st, people working in the petrochemical industry’s social media circles were flooded with a message posted by Jiujiang Petrochemical: \"Qin Weizhong has been appointed as vice president of China National Petroleum Corporation.\" But this is not an April Fools’ joke; it’s a appointment recently issued by the State-owned Assets Supervision and Administration Commission. The transfer of Qin Weizhong mirrors the appointment of Zhang Jianhua as general manager of CNPC last July, and it represents an important step taken by the State-owned Assets Supervision and Administration Commission to strengthen CNPC’s refining and chemical operations segment. With low crude oil prices, Sinopec stands out among the three major oil companies, highlighting the importance of strengthening CNPC’s refining and chemical operations in the current situation. Under the news released by Jiujiang Petrochemical, there are many comments from its employees; those who are interested can take a look. Many of these comments contain blessings and expressions of reluctance to part. Of course, the comments displayed on the official account may not represent all opinions, but I believe they reflect the mainstream view. A similar situation occurred a few years ago when Li Anxi, the head of Qilu Petrochemical, stepped down from his position. In 2015, I led a team to Jiujiang Petrochemical for a technical exchange, with three foreign experts accompanying us. The meeting was chaired by President Qin, and to my surprise, Qin had quite good spoken English; he was able to communicate directly with the foreign experts in English from time to time during the exchange. During my days in Jiujiang, I heard quite a few rumors about Qin. For example, middle-level managers at Jiujiang Petrochemical often received emails from President Qin in the middle of the night, which shows just how hardworking he is. As one of Sinopec’s five refineries along the river, Jiujiang Petrochemical was virtually unknown N years ago. However, Jiujiang Petrochemical really became popular in recent years, especially around 2015 and 2016. The main highlight is the construction of smart refineries, which represents an important achievement of Qin Weizhong at Jiujiang Petrochemical. For the first phase of Sinopec’s smart refinery pilot project, there are four companies involved: Yanshan, Zhenhai, Maoming, and Jiujiang. Jiujiang Petrochemical’s ability to make it into the first round of pilot projects is thanks to Qin’s forward-thinking vision; without the active efforts of the company’s top leader, it is unlikely that Jiujiang would have been selected. After several years of construction, all four companies completed the development of their smart refineries. However, Jiujiang Petrochemical stood out the most in terms of smart refinery development across the country; even the Ministry of Industry and Information Technology as well as CCTV visited and conducted interviews there, making Jiujiang Petrochemical’s smart refinery the most renowned at that time. Putting aside the benefits of smart refineries, let’s first talk about the advantages of being a leader in this field. To use an example, in a class there was once a student whose grades were not very good. But then this student made an effort to improve, adopted a proper attitude towards studying, and performed well in all aspects; as a result, both the homeroom teacher and the other subject teachers liked him very much. Therefore, they paid extra attention to this student and took special care of him. The student lived up to the teachers’ expectations by being diligent, and gradually moved from the middle to the upper ranks of the class as one of the top students. Jiujiang Petrochemical is like a student within Sinopec’s large family; just as with individuals, a company too needs to have spirit and vitality. The train moves fast thanks to its engine; it is through this process that the sense of honor, responsibility, and belonging among the employees of Jiujiang Petrochemical is gradually cultivated and strengthened. This is the spiritual influence that Qin Weizhong has had on Jiujiang. Let’s analyze the technical aspects: Qin Weizhong was transferred from Sinopec’s Development Planning Department to serve as the head of Jiujiang Petrochemical; he already possesses certain coordination skills due to his position at the headquarters. Upon arriving at Jiujiang Petrochemical, efforts were made to carry out structural optimization of its refining and processing operations (an upgrade project to raise the quality of oil products to 8 million tons per year), and significant investment was also put into the development of smart refineries. Smart refineries rely primarily on information technology development, and they are currently still in the exploratory stage; it will be difficult for them to bring about substantial and fundamental changes for enterprises in the short term. On the other hand, the adjustment and optimization of an enterprise’s refining operations serve as the internal driving force behind the progress of Jiujiang Petrochemical. The author believes that this is the key reason behind the rise of Jiujiang Petrochemical. Among the more than 30 refining and chemical enterprises under Sinopec, many of them, especially the older ones, suffer from an unreasonable and unoptimized refining and chemical structure, which constitutes the biggest obstacle to the development of these enterprises and affects their economic performance. The five Sinopec companies located along the river basically all face such problems. As Sinopec’s overall funding for construction becomes increasingly constrained, those who manage to seize the opportunity for corporate restructuring and optimization will be in a stronger position in the competition with other companies and in the market. On the other hand, corporate structural adjustment and optimization are highly complex systematic tasks; without a strong desire, determination, as well as the necessary capacity for implementation and coordination, it is quite difficult to achieve this goal. Taking up the position at Jiujiang Petrochemical was like an exam for Qin Weizhong, testing the vision of a company’s top leader as well as their overall capabilities in various areas. Of course, achieving these goals also depends on the joint efforts of all employees at Jiujiang Petrochemical, and this is equally important. Hard work pays off; under the leadership of Qin Weizhong, Jiujiang Petrochemical, after seven years of effort, finally delivered a satisfactory result to its headquarters. In 2016, Jiujiang Petrochemical processed 7.25 million tons of crude oil throughout the year, generating sales revenue of 32.6 billion yuan, a book profit of nearly 2 billion yuan, and paying 12.3 billion yuan in taxes and fees. Its contributions ranked first in Jiangxi Province, and it ranked among the top companies of similar size in the industry in terms of various economic and technical indicators. Its smart refinery was selected as one of the first pilot projects for intelligent manufacturing by the Ministry of Industry and Information Technology – the only one in the petrochemical sector. As the overall efficiency of the company improves, the employees of Jiujiang Petrochemical can also experience the benefits that come with the company’s progress and growth. Through our interactions with the people at Jiujiang Petrochemical on a daily basis, we can clearly sense this change. As a rising star among enterprises along the river, to be honest, Jiujiang Petrochemical is still in the process of improvement. Its future direction should be to aim at the advanced groups of enterprises within Sinopec, and narrow the gap with those more advanced entities in every aspect. Of course, there is also the development of smart refineries; it is hoped that the current V1.0 version can be improved further to bring about more substantial changes.