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Baofeng Energy plans to invest 1 billion yuan to establish a subsidiary in Inner Mongolia in order to expand its coal chemical industry chain. Author/Source: Sinochem News Network. Date: July 2, 2020. Clicks: 16. On the evening of July 1, Baofeng Energy issued a statement announcing the establishment of this subsidiary in Inner Mongolia. The subsidiary is located in the Tuk Project Area of the Sulihe Economic Development Zone, Wushen Banner, Ordos City, Inner Mongolia, with a registered capital of 1 billion yuan. The announcement states that the proposed subsidiary in Inner Mongolia will be funded with 950 million yuan from Baofeng Energy’s own funds, entitling it to 95% of the shares; the company’s wholly-owned subsidiary, Ningxia Baofeng Energy Group Olefin Plant II Co., Ltd., will contribute 50 million yuan and hold 5% of the shares. The company’s business scope will mainly include: the production and sales of high-end coal-based new materials (excluding hazardous substances); coal mining, washing, and sales; the construction of projects for gasification to produce olefins and related downstream products (excluding projects involving hazardous substances); as well as internal research and development. It is reported that the subsidiary in which Baofeng Energy plans to invest this time is located in Wushen Banner, Inner Mongolia, and falls within the energy and chemical \"Golden Triangle\" region centered on Ningdong in Ningxia, Ordos in Inner Mongolia, and Yulin in Shaanxi. This region is one of the few areas in the country rich in energy resources; its reserves of fossil fuels amount to 2,010.2 billion tons of standard coal, accounting for 47.2% of the national total. It also possesses abundant solar and wind energy resources. Located in the heart of the country, this region boasts convenient transportation, favorable coal mining conditions, and low extraction costs, providing high-quality raw materials at affordable prices to support the development of future projects. The announcement states that establishing a subsidiary in this region will further extend the industrial chain of the coal chemical circular economy, enabling a true transformation of Ordos’ coal resources from being used as fuel to serving as raw materials, and shifting its products from basic processing to high-end manufacturing. This will help optimize the regional industrial structure and strengthen the industries related to coal-based olefins, as well as downstream high-end materials and fine chemicals. Upon the completion of this overseas investment, the company’s scale advantages and strategic position in the industry will be further enhanced, thereby giving a strong boost to its overall profitability.