From October 27th to 30th, the 30th General Meeting of China Industrial Gas Industry Association and the 2020 Annual Meeting was successfully held in Kunming, Yunnan. Fang Shiwen, CEO of Yingde Gases and Baosteel Gases , Feng Gang, Vice President , and Liu Jingwu, Vice President were invited to present.
With the theme of "Innovative Transformation, Safe and Sustainable, and Intelligent Development", this conference aims to explore how the gas industry can develop healthily and sustainably under the new pattern of domestic and international double-circulation mutual promotion. At the meeting, Fang Shiwen delivered a speech with the theme of "New Pattern, New Economy-Seizing Opportunities, explore the way of the Development of China's Industrial Gases", which analyzed the current economic situation, and discussed how the industrial gas industry can leverage its advantages and seize opportunities , and achieve Continuous growth.
"Faced with the new pattern and new economy, the industrial gas industry needs to respond quickly, adjust actively, and keep up with the development of the country and society."
The outbreak and spread of the COVID-19 epidemic has changed the global economy and the world pattern, and political, economic and industrial uncertainties will become the "new normal". In the face of a severely hindered globalization process, China must give full play to its domestic super-large-scale market advantages, and gradually form a new development pattern with domestic large-scale circulation as the main body and domestic and international dual-cycle mutual promotion, through industrial upgrading, consumption upgrading and regional economic integration，maintain the momentum of development in the new economic situation.
In September, China solemnly pledged at the United Nations General Assembly to strive to achieve the peak of carbon dioxide emissions by 2030 and achieve net zero carbon dioxide emissions by 2060. As the world's number one carbon dioxide emitter, China's reduction of carbon emissions is bound to bring about tremendous changes in energy application patterns. In the future, China will reduce the total consumption of high-carbon energy, improve energy efficiency, strictly promote policies and measures to reduce coal and oil, apply and improve carbon emission reduction trading mechanisms, and regard renewable energy as the main energy source.
Fang Shiwen pointed out that in the face of a new pattern and a new economy, the industrial gas industry needs to respond quickly, actively adjust, and keep up with the development of the country and society. "On the one hand, industrial gas companies should seize the growth opportunities in domestic refining, electronics, bio medicine and other industries, actively explore business directions, and use informational and digital means to promote the transformation of traditional production, supply and services to the Internet of Things model. Keep pace with the times and continuously strengthen our core competitiveness. On the other hand, we need to pay attention to the profound impact of carbon emission reduction on customer industries, and actively participate in this green revolution through the development of hydrogen energy, and strive to take the lead in the future market."
"Thanks to long-term stability and high return rates, industrial gas companies have always been favored by the capital market."
Thanks to long-term stability and high rate of return, industrial gas companies have always been favored by the capital market. Compared with general chemical companies, industrial gas companies have a strong anti-cyclical capacity. This attribute is particularly important when the economy is relatively depressed or systemic risks come.
From the perspective of the capital market, the value of industrial gas companies has been maintained and increased from the cash conversion rate of investment, long-term product price management, long-term efficiency improvement and sustainable development，which means that industrial gas companies need to improve production efficiency and management capabilities, continue to reduce costs and increase efficiency, maintain long-term stability and a high rate of return. At the same time, facing the decarbonization process in the energy sector, China's industrial gas companies should pay attention to hydrogen energy and its application scenarios, explore the development of hydrogen energy, and provide green hydrogen energy for the industries it serves.
"China Industrial Gas Companies enjoy broad room for development. We need to give full play to the advantages of latecomers and grasp the growth opportunities brought by the new economy and new structure."
Beginning in the 1980s, international industrial gas companies have successively entered the Chinese market; around the new century, China has gradually established its own industrial gas companies. After nearly two decades of exploration and development, some domestic gas companies have established presence in some regions or parts of the country. In the field, they have the ability to compete with international competitors. As Fang Shiwen said: "China Industrial Gas Corporation has a broad space for development. We need to give full play to the advantages of latecomers and grasp the growth opportunities brought by the new economy and new structure."
Fang Shiwen believes that China’s industrial gas companies should learn to embrace capital and use capital as a booster and amplifier for company development: “Most of China’s industrial gas companies operate under industrial rules and are not closely related to the capital market. On the international stage, however, the relationship between industrial gas companies and capital markets is much closer. In the past four decades, the total revenue of the world industrial gas industry has doubled by about ten times. After many mergers and acquisitions, the company has formed the pattern dominated by the three major gas companies of Air Products such as Linde, AL and APCI. The merger and integration of Linde and Praxair, is a case of close cooperation between production companies and the capital market. Yingde Gases and Baosteel Gases were discovered and acquired by PAG Investment Group. The transformation path opened after the acquisition and upgrading can also provide a reference for domestic industrial gas companies."
The Chinese market has significant scale advantages. Facing the new pattern and new economy, China's industrial gas companies should build core competence modules suitable for internal and external environments. At present, China Industrial Gas Company should seize opportunities such as the park’s pipeline network and hydrogen energy, improve business integrity, and learn to leverage different advantages to develop; improve engineering capabilities, operation management efficiency and price management level, strive to reduce costs and increase efficiency, and support the development of business and products，and diversified development; at the same time, it is also necessary to absorb professional and systematic management concepts, use digital means to improve production and management efficiency, and respond to the call of national green development, explore the use of blue hydrogen and the hydrogen energy industry chain, and promote carbon emission reduction. Under the general background, fully tap their own value.
In addition, China Industrial Gas Company can also draw experience and strength from internationalization. "With the support of national policies, many client companies have gone abroad. This is also a great opportunity for industrial gas companies to "borrow a boat to go to sea". Since we are going to overseas markets, we should adopt professional and professional business models and management methods. And establish a more inclusive corporate culture that can gain international recognition and resonance, gather domestic and foreign talents, and enable the company to move forward toward strategic goals.
2020 is an extraordinary year, and both the world and China have entered a new stage. The time of change and challenge is also the time of thinking and growth. As Fang Shiwen said: “Operating a business or starting a business is like a snowballing process. You need to find a long slope with very wet snow on the slope. Talented People and capabilities make the snowball bigger and bigger. The Chinese market is just such a long slope where you can take advantage of it. Gas products and models are very wet snow. What needs to be considered now is to face the new world pattern and economic environment, whether we have the right personnel and sufficient capabilities to support sustainable development or not. I believe that the industrial gas industry will embrace a bright future, but we still need to make more efforts to adapt to the new economy and new pattern. Take the initiative to seize opportunities, continue to create value, and jointly write the blue history of China's industrial gases!"