Maoming Petrochemical: Innovation takes an unconventional path

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In the face of the new normal, Maoming Petrochemical vigorously promotes scientific and technological progress and innovation-driven development, focusing on the development of new products with strong competitiveness and high added value in order to create as many new sources of profit growth as possible. They adhere to a high-end, differentiated approach, aiming to achieve \"having what others don’t have, being better than what others do have, leading in the domestic market, and entering international markets.\" They make full use of the strategy of integrating production, sales, and research to address the \"pain points\" in the market, actively develop original products that can replace imports, and strive to build a brand advantage. Since the beginning of this year, Maoming Petrochemical has focused on market demands, making every effort to optimize its product portfolio and enhance its reputation for high-end new products. As of May this year, the company produced 462,700 tons of new chemical products and specialty materials, generating an economic benefit of 58.88 million yuan; the rate of high-quality products reached 100%, and its output of new products ranked first among all headquarters-affiliated units. Only by embracing all streams can it become a river or sea. Yin Zhaolin, general manager of Maoming Petrochemical Company, believes that technological innovation is \"a bus ride that cannot be delayed\"; we must promote open innovation in all aspects in order to turn Maoming Petrochemical into a world-class high-end petrochemical industry hub. Creating a premium brand identity: Production volume increased from over 4,000 tons in 2012 to 20,000 tons by 2016, with the output of the high-density polyethylene IBC-specific material TR580M quadrupling. This material successfully replaced imported variants, making the company the largest supplier in Asia for downstream multinational enterprises. The research results from this project won the third prize for scientific and technological advancement from the group company in 2015. TR580M has become a symbol of Maoming Petrochemical’s capabilities at the 10,000-ton level, adding another significant contribution to the premium image of its synthetic resin products. In 2010, while promoting high-density polyethylene products, the Maoming Petrochemical Research Institute identified a new market trend: two large petrochemical companies in Europe and South Korea had developed improved products by adding UV-resistant components to high-density polyethylene raw materials, and these products were being widely used in the manufacture of IBC containers. IBC containers are a new generation of industrial packaging containers, and demand for them in the market continues to grow rapidly; the market size is very large. Therefore, Maoming Petrochemical promptly began working on the development of additive formulations, and in September 2010, the IBC-specific material TR580M was successfully produced for the first time. However, alongside the joy, there is also a promotion challenge: how to help customers understand and accept this new product as quickly as possible. Faced with this challenge, our experienced R&D team did not rush to release the product; instead, they first looked for ways to promote it in the market. IBC containers are classified as packaging containers for hazardous chemicals; they require strict standards regarding the properties of the materials used and their safety characteristics, resulting in very high entry barriers. The leading companies in this industry have a significant influence on the sector. Given the characteristics of this industry, Maoming Petrochemical did not adopt the approach of having students work through questions starting from the easier ones; instead, it did the opposite by starting with the most challenging tasks, focusing first on the leading companies in the industry. The leader in the IBC industry is the German company Schüco; it is not only the inventor of IBC but also the largest producer of IBCs worldwide, with several factories located in China. However, it is not easy to break into the Shuchi market. It took several years to capture this fortress. In 2010, the company produced a trial batch of the IBC-specific material TR580M and supplied it to Schuchardt for testing. In 2011, the company began producing the first batch of IBC-specific material TR580M for use by Schuchardt. In 2012, Shuchi signed a long-term procurement contract with the company and officially adopted TR580M, thereby entering their global supply chain. In 2015, Maoming Petrochemical made further improvements to TR580M, resulting in enhanced product performance. It obtained international kosher and halal certifications for the first time, which opened up new avenues for entering international markets; it subsequently passed all tests required by German Schütt. At this point, Maoming Petrochemical has replaced foreign competitors to become Chery’s largest raw material supplier in Asia. After gaining access to the supply chains of industry leaders, the TR580M became a benchmark for IBC-specific materials in China. Maoming Petrochemical then focused its efforts on promoting this product in key regions such as the Pearl River Delta and the Yangtze River Delta. Thanks to its excellent performance, stable supply, and reliable service, it quickly made its way into the production lines of more than a dozen IBC manufacturers. Manufacturers in areas such as the Northwest also approached them, requesting trials and supply of this product. As a result, production and sales volumes continued to rise, and the TR580M has become yet another key product in Maoming Petrochemical’s high-density polyethylene hollow series. Over the course of several years, the TR580M gained widespread acclaim within the industry for its production and sales volume of 20,000 units as well as its excellent performance; its development and promotion process was regarded as a classic example of replacing imported products. “The growth journey of TR580M, this enterprise card of massive scale, shows that opportunities favor those who are determined, and the potential for meticulous management exists everywhere. ”said Zhong Xianghong, the director of the research institute. Differential development to fill gaps: Maoming Petrochemical vigorously promotes scientific and technological progress and innovation-driven development, adopts a differential strategy, and makes every effort to develop new products. “Since the 12th Five-Year Plan period, Maoming Petrochemical has developed a total of 63 new products. Among these, 8 have reached international advanced levels; 10 have managed to enter the supply chains of 13 well-known multinational companies; and 18 new products have filled gaps in the domestic market. What others don’t have, I have; what others have, I do better. The transparent polypropylene series developed in a differentiated manner by Maoming Petrochemical is a model in China for offering superior products, achieving product serialization, and building a strong brand; the annual production volume of these series exceeds 40,000 tons. Compared to conventional materials, it generates an annual benefit of over 32 million yuan; its products find use in various applications across this downstream industry. It offers \"one-stop\" procurement services to top international home goods companies such as Walmart in the United States and IKEA in Sweden, and is highly praised and favored for this. The large and medium hollow series of products developed by this company are highly favored by leading multinational corporations; they have managed to gain a place in the supply chains of numerous multinationals. In addition to Cotais and Shuchi, the company signed an annual procurement agreement in line with international standards with another multinational company, Greif, this year. The annual production and sales volume of these product series continues to increase. At present, Maoming Petrochemical makes full use of various scientific and technological resources both within and outside the system, focusing on breakthroughs in high-end technologies. It advances open innovation in all aspects around five areas: energy development and utilization, new chemical materials, specialty fine chemicals, modern coal chemical industry, and energy-saving and environmental protection technologies, striving to become a world-class high-end petrochemical industry hub. “Focusing on efficiency and driven by the market, we strive to optimize the product structure of our facilities, adopt a differentiation strategy, actively develop new products with high technological content and added value, and work hard to increase the proportion of such new products and specialized materials. ”Xie Weixin, the manager of the chemical division, said. To make the new products successful in the market, Maoming Petrochemical takes proactive steps to promote their distribution and provide market-related technical support, thereby laying the groundwork for their sales and helping them become successful products in the market. In recent years, 23 product grades have been identified by the Chemical Sales South China Branch as key flagship products for 18 partner customers. To promote the new products, Maoming Petrochemical established a market promotion team headed by company executives, with key leaders from the R&D, production, and sales departments as well as experienced staff participating. This team regularly visits customers in the Pearl River Delta, the southwest region, and areas surrounding Maoming, in order to understand their needs and stay abreast of market trends. On the one hand, they expand the impact of their new products from point to area by collaborating with leading multinational companies in the target application sectors ； On the other hand, it actively collaborates with manufacturers of downstream processing equipment by getting involved before the equipment leaves the factory, using the new products as test materials to increase customers’ reliance on them. Maoming Petrochemical is committed to establishing a product supply model with its own characteristics, one that offers comprehensive solutions for customers based on the elements of \"products + services + formulations + certifications\". Standardize the trial report for new products, compile guidebooks on their key performance characteristics for customer reference, and establish the company’s external \"Product Information Center\" and \"Customer Service Center\" platforms to facilitate efficient information exchange between customers and the company regarding product requirements and quality improvements. For any technical issues that require on-site service from customers in South China, on-site assistance can be provided within 48 hours. To date, a total of 43 new chemical product grades have obtained 222 certifications from various agencies regarding food hygiene, approval for medical use, and other related aspects. These certifications provide support for new products to enter multinational corporations’ procurement chains and further expand their market share. “The \"Trinity\" innovation and development model: Maoming Petrochemical is intensifying the integration of production, sales, research, and application, and making significant efforts to innovate new product development approaches. Through market research and enhanced communication with downstream user enterprises, customized new product development services are provided based on a thorough understanding of user needs, with new products designed specifically for particular user enterprises to meet their specific requirements. Establish a unique product and technical service system, making full use of the company’s R&D institute’s technical expertise and talent to deliver better, differentiated services compared to other competitors. By establishing a product technology service mechanism of \"one consultant per product,\" active market promotion services for products are provided, thereby creating a product supply model that offers comprehensive solutions to customers. Led by the enterprise, Maoming Petrochemical strengthens the integration of industry, academia, and research, pursuing an approach of open and collaborative innovation to continuously generate scientific research achievements. Over the past three years, it has undertaken 5 key R&D projects under the headquarters’ “Ten-Project Initiative,” including the development of special polypropylene resins for low-temperature packaging, as well as the development and application of technology sets for producing high-quality base oils through hydroisomerization and dewaxing, thereby significantly raising the quality level of its premium products. Collaborate with research institutions. Since 2011, collaborations with 26 institutions including Tsinghua University, Sun Yat-sen University, Xiamen University, Beijing Research Institute of Chemical Technology, and Shanghai Research Institute of Chemical Industry have yielded fruitful scientific research results. In 2011, an annual technical exchange mechanism was established with the North China Institute of Chemical Technology, setting a precedent for regular technical exchanges between production enterprises and research institutions within Sinopec. Over the past few years, the two parties have jointly developed 21 new chemical products ； “\"Building nests to attract phoenixes\" cooperation. Maoming Petrochemical established a postdoctoral research station in 2011; to date, 7 doctors have joined this station, and 3 more will be brought in this year, thereby alleviating the shortage of high-level scientific research talent. In cooperation with universities such as Sun Yat-sen University, Xiamen University, and South China University of Technology, which jointly train doctoral fellows, as well as research institutions like the Shanghai Institute of Chemical Industry and local governments, 7 research projects on cutting-edge core technologies have been carried out. This has expanded the sources of funding for research projects, improved their quality, and provided intellectual support. Form partnerships with downstream enterprises. Last November, a new polypropylene product named MM18-S was developed in collaboration with Guangzhou Jinfafa Technology Co., a leading global manufacturer of new materials; the price per ton of this product is more than 1,000 yuan higher than that of conventional materials. This marks a new path of customized cooperation in the research and development, production, and sales of new products by Maoming Petrochemical. At the Jinfa Technology Supplier Conference, Maoming Petrochemical won the company’s Annual Technical Cooperation Award. Research project „Team leader responsibility system“. In terms of system design, the traditional vertical administrative management model that has persisted for years was overturned, and a system based on the responsibility of project leaders was fully implemented. Academic qualifications and experience were no longer the only considerations; technical experts were encouraged to take charge of projects and assume heavy responsibilities, with rewards being determined based on the outcomes of those projects. At the same time, Maoming Petrochemical not only takes meticulous care of key scientific and technical personnel in terms of their daily lives, strives to nurture them as they grow, and awards them honors in a timely manner when they make contributions, but also adheres to the principle that rewards should be compelling enough to inspire motivation. By establishing a \"multi-channel and comprehensive\" reward system, it has fully stimulated the enthusiasm and creativity of researchers in technological innovation. For example, for those who achieve scientific research results, in addition to offering bonuses, these results are used as important criteria for annual performance evaluations, recognition of excellence, and promotions to higher professional positions ； In addition to the awards given by higher authorities to the key researchers behind scientific and technological achievements at the provincial or ministerial level and above, the company also provides supplementary rewards ； A assessment scheme for the development and sales of new chemical products has been established; if the price of these new products or specialty materials meets the set improvement targets compared to corresponding conventional materials, a reward of 50,000 yuan will be given, with an additional 1,000 yuan awarded for each extra yuan per ton. “This \"push mechanism\" encourages customers to come to Maoming on their own. Located in western Guangdong, Maoming does not yet have access to modern transportation methods such as airplanes or high-speed trains, and it is also about 4 hours’ drive away from the economically developed Pearl River Delta region. Despite being in a remote area, global procurement directors from multinational companies such as IKEA, Mercedes-Benz, and Coty travel great distances to visit Maoming Petrochemical regularly. In today’s era of economic globalization, their procurement approaches are no longer based on the traditional models of seeking low costs and high quality; instead, they focus on establishing long-term, stable supplier relationships and growing together with their suppliers. They take into account not only external factors such as products, costs, prices, and services, but also internal aspects of companies, including management levels, the qualities of leaders, as well as issues related to safety, environmental protection, corporate culture, and labor relations. Accepting their supplier audits forces one to reevaluate the management processes that one thought were praiseworthy, to identify details that have been overlooked until now, and often to completely change the balance of systems that have already been established. For example, a company in Germany introduced a new high-speed production line, which imposed new requirements on the processability of raw materials; it also requested changes to address the issue that the product packaging lacked trays, which made it difficult to load and unload the products using forklifts ； Another German-owned company requested improvements regarding the performance indicators of its upstream and downstream partners, such as on-time delivery rates, cost-profit margins, and product quality acceptance rates; it even demanded that the uniforms worn by the workers responsible for loading products be standardized. By proactively establishing a \"pushback mechanism\" driven by product users, with the company’s relevant leaders taking charge and various internal departments such as those responsible for safety, environmental protection, corporate management, human resources, production, technology, legal affairs, and international relations working together, efforts are made to conduct thorough audits of suppliers for multinational companies. This user-driven pushback helps to enforce stricter management practices, thereby improving overall management standards. It is necessary to completely overturn the outdated attitudes prevalent in traditional large-scale petrochemical manufacturing enterprises, such as an egocentric mindset and the notion of treating themselves as the \"big brothers\" among state-owned enterprises. (