July 2011

ISSUE 46July

Yuxing Chemical Gets Titanium White Panel and LabHunan Xiangwei Becomes High-tech CompanyTianhua Institute 's Integrated Process and Equipment Technology Development

SASAC Chairman Visits QenosRen Jianxin Visits Victoria's GovernorChemChina: One of the Greenest SOEs during 11th Five-Year Plan

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ChemChina Master Data Management ProjectChina Haohua Launches OA ProjectChemChina Oil & Gas ERP Project

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Huaihe Chemicals Agreement with Nanjing University's Jinling SchoolCNCIC at Asian Petrochemical Industry ConferenceHaohau Junhua's Lean Management ProjectChemChina Finance Dept Donates Books to the NeedyChangyi Petrochemical's Philanthropic Contributions

National Water-soluble Polymer Technology Development CenterHeilongjiang Haohua Caustic Soda and PVC Project Go OperationalBeijing Bluestar Cleaning's Business Breakthrough AbroadChina's First Tire Llifecycle Management System

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Signing Ceremony for Zigong Industrial Base OpeningRen Jianxin Visits TBMCQenos Inducted to Victorian Manufacturing Hall of Fame

Safety Quizzes Improve Safety Performance8

China Bluestar Petroleum Chemical's 863 ProjectsNational Gas Standards Formulated by SRDICI

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Project

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Employee World

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Technology

Events

July 2011

ISSUE 46 EVENTS

1

SASAC Chairman Visits QenosWang Yong, Chairman of the State Assets Supervision

and Administration Commission (SASAC), met with all the managers of central SOE businesses in

Australia,on the afternoon of May 20 as part of his oceanic visit. ChemChina President Ren Jianxin brought Wang up to date on operations at Qenos, part of Bluestar's portfolio and one of ChemChina's major subsidiaries. The morning of May 21, Wang visited the Botany site of Qenos in Sydney, accompanied by the SASAC delegation. Jonathan Clancy, Qenos CEO, briefed him on business operations before making a field inspection. Wang affirmed the progress Bluestar and Qenos have made since the acquisition, calling Qenos the best example of Chinese investment in Australia. He also praised Qenos' track record and operational and management excellence and expressed his best wishes for future development of the company. In conclusion, Clancy spoke on behalf of his management team about their commitment to the success of ChemChina, in accordance with SASAC rules on building world-class SOEs

that are competitive globally. Ren Jianming, Vice President of ChemChina, and Robert Lu, President of Bluestar, were present at the meeting.

Ren Jianxin Visits Victoria's Governor

ChemChina President Ren Jianxin paid a visit to the Governor of the State of Victoria, Australia, Ted Baillieu, in Melbourne

on the afternoon of May 23. Ren talked about China's 12th Five-Year Plan and the recent operations and progress at Qenos and thanked the state for its years of support, especially with respect to energy-savings and plant expansion. The state government's subsidies and other financial support projects reflect the great attention the government gives to Qenos projects, he said, adding that Qenos will contribute, as it always has been, to local economic development, employment and the community. Baillieu spoke about Victoria's favorable investment climate and public utilities and reiterated the government's support for Qenos' expansion projects.

ChemChina: One of the Greenest SOEs during 11th Five-Year PlanChen Fenglin

The State Council's State-owned Assets Supervision and Administration Commission recently held a conference

on energy saving and emissions reduction to discuss the ranking of major SOEs in their energy-saving, & emission-reduction efforts, as well as their management practices and the Top 1,000 Energy-Consuming Enterprises Program under the 11th Five-Year Plan. ChemChina stood out as a

major contributor to energy saving and reduced emissions during that period, and ranked 16th among the SOEs reviewed. All SASAC performance targets were met. Meanwhile, the 18 ChemChina companies that are part of the NDRC's energy-saving Top-1,000 Energy-Consuming Enterprises Program met their objectives.

July 2011 2

ISSUE 46 EVENTS

Signing Ceremony for Zigong Industrial Base Opening

The Governor of Sichuan province, Jiang Jvfeng, and ChemChina President, Ren Jianxin, joined other leaders for a signing ceremony in Chengdu on June 17 to mark the opening of

ChemChina Haohua's Zigong Industrial Base. The base is being built to assist the basic chemical business, especially chlorine and fluorine, by making better use of bittern resources and Haohua Honghe's technology. The 10-billion-yuan industrial base will have 16 projects, which are expected to total more than 10 billion yuan in assets and generate more than 1 billion yuan in profits by the end of 12th Five-Year Plan. By that time, the base will be environmentally friendly and fine chemicals will account for 70 percent of its business, and basic chemicals, 30 percent. (Photo by Shi Lei.)

Ren Jianxin Visits TBMCChemChina President Ren Jianxin led various

department reps and Bluestar managers on a tour of Toray Bluestar Membrane (Beijing) Ltd (TBMC) in

the Shunyi Airport Development Area on the afternoon of May 30. Ren praised TBMC leadership's achievements and said that the company slogan -- "To be China's first membrane maker to address water shortages for mankind" -- reflected the company's vision, strategic objectives, and social responsibility and that China's immense water-treatment and desalination market definitely meant tremendous potential for TBMC. TBMC is a Bluestar-Toray joint venture that was established in 2008 to develop water recycling and desalination by using Toray's superior technology and Bluestar's market ability. Now, after more than a year of operations, TBMC has become China's largest reverse

osmosis membrane assembly manufacturer, with an annual capacity of 130,000 ROM components.

Qenos Inducted to Victorian

Manufacturing Hall of Fame

At the Victorian Manufacturing Hall of Fame Awards ceremony

in Australia on May 26, Qenos, a branch of ChemChina, was recognized for its good business performance and outstanding contribution to the economy. The award was set up by the government of the State of Victoria in 2001 to recognize local companies that come up with major innovations and state-of-the-art solutions to pressing challenges or crises. Since then, 117 companies, 23 entrepreneurs, and 9 young industry leaders have received the award. Qenos Executive President Ross McCann was added to the Hall of Fame in 2010.

July 2011 3

ISSUE 46 EVENTS

China Bluestar Petroleum Chemical's 863 Projects

Wu Chunxiang

Recently, a panel of experts from the National 863 Program's resources and environmental technology office did feasibility demonstrations for four China Bluestar Petroleum Chemical projects under the

863 Program project, for common and key technology for aluminum/chromium sub-molten salt clean production, including integrated technology for clean production of chromate salt using a sub-molten salt method and zero chromium residue discharge. The panel decided that the implementation plan and technical roadmap were scientifically correct, reasonable, and feasible, and that the work structure and job

National Gas Standards

Formulated by SRDICIXie Zhaoping

Five new national gas standards, including hydrogen selenide for use in the electronics

industry, were recently adopted by China's Standardization Administration, according to the National Gas Standardization Committee's Secretariat, currently seated at Southwest Research & Design Institute of Chemical Industry (SRDICI). The standards will help China regulate its gas market better, and improve the quality of gas and put China's gas industry more in line with international practices. The five gas standards formulated or revised by SRDIC, some of the first national standards to be enacted this year, are as follows: Hydrogen selenide for use in the electronics industry, arsine for use in the electronics industry, boron chloride for use in the electronics industry, toxic and flammable gas detection system for fluorine, mixture of fluorine and nitrogen with safety evaluation guidelines.

responsibilities were well defined, and the annual plan detailed and clear and the objectives specific. The plan, they said, was expected to produce the objectives as described for all of the projects. The four projects were started by China Bluestar Petroleum Chemical and the Chinese Academy of Sciences' Engineering Research Institute and had government grants totaling 10.28 million yuan and equivalent funding of 35 million yuan. This project provides solid backing for ChemChina in further developing integrated technology for the clean production of chromate salt, using a sub-molten salt method with zero chromium residue discharge.

Xinghuo Plant W2 Workshop is one of the early built workshops for the 200,000t/a silicone integration

project, also an outstanding example of Xinghuo- BSI cooperation. Workers at W2 Workshop have learnt a lot from BSI experts and mastered the operation of high temperature adhesive unit. Xinghuo Plant, as a pilot plant for introduction of global best practices, has a total number of 21 foreign professional managers and experts working at the site. After two years of working and living at the plant, they have built a strong bond with the Chinese workers. The picture above shows W2 workers learning operation techniques from BSI experts. Photo by Du Yanqing

July 2011 4

ISSUE 46 PROJECT

ChemChina Master Data Management Project

Ni Yanyan

The ChemChina Master Data Management (MDM) project passed its check on May 26, after the review committee

found that the deliverables had all been reviewed by the project supervisor and the project had reached its objectives and criteria for global chemical industry practices. When this project is implemented it will refine the organization process and procedures of ChemChina data management; establish an information standardization system; optimize the existing 12 data standards for the central management of ChemChina data; integrate business management requirements; and support the master data requirements for various information systems. It has established a uniform master data management system; provided a place for the application, review, dissemination and modification of master data; ensured the quality of master data; provided digital support for the normalized, standardized and institutionalized management of ChemChina master data; and helped integrate with the six business systems -- SAP ERP, KPI, BW, OA, CP (Bluestar Central Procurement Platform), and HR. Project deliverables can be duplicated in ChemChina companies to have a real-time integration and more efficient sharing of standard data throughout ChemChina. This project has optimized the operation & maintenance system, process and policy for master data management at the data center, shortened the master data response time, improved master data management performance, provided better service and support for ChemChina business operations, and laid a solid foundation for ChemChina to avoid project risks and will continue to improve its business quality and speed up the move to informatization.

China Haohua Launches OA Project

Chai Yutian

China Haohua Chemical (Group) Corp's management visited Shenyang Chemical on June 8 and Siping Haohua on June 9

to mark the beginning of the ChemChina OA project at Haohua. Haohua will begin executing the project at its five business units -- chlorine and alkali, coal chemicals, technology, trade, and mining -- from early June. The project is expected to be fully activated in late September and begin closed operation around the time of Spring Festival, 2012. To ensure that the project goes as scheduled, a teleconference was held for the head office and leaders and project managers of 30 subsidiaries on June 7 where personnel were asked to describe the functions of the ChemChina OA system and its application plan.

ChemChina Oil & Gas ERP Project

Shang Guosheng

The ChemChina Oil & Gas Corp held a meeting to mark the beginning of its ERP project on

June 8, through a multipoint videoconference, with the main venue in Beijing, and eight branch operations at subsidiaries in Shandong and in Northeast China. ChemChina Vice President,

Yang Xingqiang, told the conference that the ERP project is an essential part of the IT-driven management change and a responsibility shared by all operating departments and not just a task of the IT department. The success of the go-digital drive depends on the involvement and contributions of business departments and training is important and should be given top priority. The input from IBM and SAP consultants should be noted and the proposed international practices respected. The ERP system is expected to play a major part in business management, according to Yang.

At the 12th China International Environmental Protection Exhibition, June 7 to 10, the

booth of Bluestar (Beijing) attracted a number of domestic and foreign customers, thanks to Bluestar's reputation and the booth's appearance. The Bluestar (Beijing) water treatment and chlorine alkali equipment business got quite a bit of attention. Meanwhile, 20 Bluestar (Beijing) technicians took part in technical exchanges held by the Environmental Protection Industry Association. Photo by Zhang Li.

July 2011 5

ISSUE 46 PROJECT

Huaihe Chemicals Agreement with Nanjing University's Jinling School

Liang Sumei

The Jiangsu Huaihe Chemical Co, Ltd signed an agreement with Nanjing University's Jinling School on product development, technical innovation and development of talented people on May 26. The partnership is intended to help Huaihe Chemical become better at developing new technologies and building a good human resources system to support the go-green initiative. The two are expected to work together in setting up a Jinling School-Huaihe Chemicals Collaboration Center to implement R&D, HR development, and commercialization of inventions projects.

CNCIC at Asian Petrochemical Industry Conference

Dong Shuping, Gao Yan

At the 2011 Asian Petrochemical Industry Conference in Fukuoka, Japan, May 25 to 27, CNCIC was invited to deliver a report on polyolefin and PVC. To increase its media exposure, CNCIC reserved a desirable booth in the exhibition area and made good use of the display board to attract visitors. CNCIC communicated with major consultancies and information providers on the exhibition floor, and helped build its image in the international petrochemical business.

Haohau Junhua's Lean Management Project

Pan Hui, Wei Yong

Haohua Junhua Group Co, Ltd started a CTPM lean management project recently and has now automated its production through a DCS central control & equipment status online monitoring system, electronic patrol inspection system, and video surveillance system. This CTPM lean management project is designed to provide an end-to-end, participatory approach to equipment management, and continuous improvement and elimination of waste for world-class manufacturing. Promoting the CTPM project will help the company form its own unique management culture, the organization's DNA. After the opening ceremony, the company identified seven pilot areas and seven managers who will be in charge of those areas.

ChemChina Finance Dept Donates

Books to the NeedyZhu Haoyun

To make better use of some unused books on employees' shelves and give children of poor families easier access to reading materials, the ChemChina Finance Department called on ChemChina employees to donate books to the rural Datan Middle School in Hebei Province, with generous support of All China Women's Federation. Many employees from the ChemChina Science & Technology Department, the Planning & Development Department, ChemChina Assets Co, Bluestar, and ChemChina Finance donated a large number of books. Financial department employees bought a number of new books, reflecting the current needs of the recipients. About 1,000 books were donated as a result.

Changyi Petrochemical's

Philanthropic Contributions

Liu Bin, Zhang Junwei

Shandong Changy i Pe t r o chem i ca l was recently named a "Philanthropic Enterprise" by the Weifang Philanthropic Society after having been recognized by Weifang's Municipal Civil Administration B u r e a u a s a " M o s t Ph i l a n t h r o p i c Enterprise". The company has donated 1.17 million yuan in cash to disaster victims and people in poor areas for some years now. About 47,000 yuan was given to three of its employees who fell ill in 2010. And its employees frequently give daily necessities such as rice and cooking oil to poor people in the village of Xihuabu near the city of Changyi under a long-term arrangement they have made.

July 2011 6

ISSUE 46 PROJECT

National Water-soluble Polymer Technology Development Center

Zhao Xiaoshu

A National Water Soluble Polymer Technology Development Center was established on June 10, with help from Dalian Research & Design Institute of Chemical Industry.

The Institute sought the help of 35 prominent experts from various universities, including Tsinghua, Zhejiang, Tianjin, and Dalian University of Technology, in forming a committee to oversee the running of the center. It also got assistance from six scientific research institutes, including Chinese Science Academy's Institute of Physics and Chemistry, and Changchun Institute of Applied Chemistry, as well as 11 manufacturers. The center will do R&D activities on common technologies, and establish a technology development site, as well as multifaceted cooperation to develop water-soluble polymer products and more applications of water-soluble polymer products and technologies. This will cover the water treatment, oil extraction, papermaking, beneficiation, food, textiles, building materials, and environmental protection fields.

Heilongjiang Haohua Caustic Soda and PVC Project Go Operational

Shi Mingming, Jiang Zhongli

Heilongjiang Haohua Chemical Co, Ltd's 300,000 t/a caustic soda and 300,000 t/a PVC plant went fully operational on

June 1 and were duly commissioned after only the first trial, to produce the first batch of resin. Four years ago, ChemChina President Ren Jianxin visited the plant whose name was Qiqihar Petrochemical to breathe new life into what was then a poorly managed business, at the same time giving it the new name "Heilongjiang Haohua". In August 2009, the upgrade was completed, and the plant was duly commissioned last October, when the chlorine alkali system started in four electrolytic tanks. A system overhaul and retrofit started this past April, and the electrolytic operation capacity was gradually increased for combined operations. The PVC plant was already in the preparation process. This plant employs a state-of-the-art DCS control system, with the leading domestic membrane polar pitch natural recycling electrolytic tank and a proven US-made polymerization kettle. The centrifugal drying process is Japanese industrial technology, which not only effectively lowers operating costs and improves safety, environmental performance and controllability of the plant but also makes the PVC quality more consistent.

Beijing Bluestar Cleaning's Business Breakthrough

AbroadWang Yuhong

After three months of negotiations, Beijing Bluestar Cleaning signed a steam boilers

cleaning contract with a Central Asian company that is one of the largest natural gas developers in the region. It supplies China with 100 million cubic meters of natural gas every year. Its three main steam boilers are heavily encrusted and several foreign cleaning companies who tried to help were

unable to meet the requirements because of the special nature of the boiler water. After Beijing Bluestar Cleaning analyzed and tested the boiler drawings, scale samples, and water samples, and reviewed the equipment, it submitted a technical renovation plan and quotation, and was awarded the contract. As of today, preparations for the cleaning project have been completed. The materials and equipment needed for the project were transported to the site by sea in June, and company's personnel will soon be in place.

China's First Tire Llifecycle Management System

Xu Li, Wu Zhenzhi

Aeolus Tyre's world-class patented Tire Lifecycle Management System (TLCM)

recently went into full swing. This system makes Aeolus Tyre the first tire manufacturer in China, if not the entire world, to have full, end-to-end management and monitoring of the tire production process. This system not only reflects the state of development at Aeolus Tyre's scientific, computerized and visualized management practices, but also makes the zero-defect tire possible.

July 2011

ISSUE 46 TECHNOLOGY

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Yuxing Chemical Gets Titanium White Panel and LabRen Chun, Chu Yuhui

The Jinan Yuxing Chemical Co, Ltd recently set up a lab for its chief expert and a titanium white panel consisting of eight experts from Yuxing Chemical and Guangxi Dahua. This is a strategic move to improve

the company's R&D ability, capture a strong position in the

Hunan Xiangwei Becomes High-tech CompanyLiu Xiaobin, Zhang Dairong

Hunan Xiangwei was recently certified as a h igh-tech company, according to an announcement from the National High-tech Enterprise Accreditation Management

Leadership Team, Hunan Provincial Department of

Tianhua Institute's Integrated Process and Equipment Technology Development

Yan Jianting

A PIA integrated filtration, washing, and pre-drying process and equipment technology deve lopment project that the Tianhua Institute of Chemical Machinery & Automation

instituted for Sinopec was recently accepted by Sinopec in Beijing as a leading global achievement. The project involved a continuous pressure drum filter system that combines filtration, washing, pre-drying and unloading, based on the study and analysis of an existing PIA refining unit filtration process. This new drum filter uses first-level pressure filtration to replace the previous "centrifugal-build-in-beater-centrifugal" separation

process and simplifies the process while meeting PIA production process requirements. The technology represents something of a breakthrough and has been patented nationally. The pressure filter has been successfully applied at Yanshan Petrochemical Ltd's 50,000 t/a PIA plant, with stable operations, low failure rate, a moisture content of around 12 percent, and consistent product quality while complying with production process requirements. The equipment is compact and easy to maintain, while consuming less energy, and has great potential for production applications.

development and application of new titanium white technology and products, and become a leading titanium white products manufacturer. This cross-company panel of experts, headed by titanium white powder expert Xing Jiyu, represents a consortium of key technologists from the two companies.

Science and Technology, Department of Finance, Bureau of National Taxation and Bureau of Local Taxation. Newly recognized high-tech companies are eligible for a 15 percent reduction in income tax for three years, according to relevant regulations.

July 2011 8

ISSUE 46 EMPLOYEE WORLD

Safety Quizzes Improve Safety Performance

ChemChina companies periodically carry out safety-awareness campaigns to make all employees more safety minded and to encourage them to strictly follow safety rules and regulations. Some recently held safety quizzes given at ChemChina companies had astonishing results.

On May 27, Zhonghao Chenguang Research Institute of Chemical Industry gave more than 90 of its middle managers a two-hour written exam on safety laws and regulations and corporate safety rules and regulations. All of them successfully completed the exam within the required timeframe. On the same day, Guilin Rubber Machinery Factory gave a "safety is everyone's responsibility" quiz contest to more than 50 employees and 13 teams. Meanwhile, Changyi Petrochemical is conducting a 100-day safety drive with the slogan "No blood-stained profits", which started on May 21 and runs to August 25, in addition to giving random surprise inspections. At Huaxing Petrochemical, workshop directors have been losing no time in keeping operators and team leaders familiar with technical processes, theories, and production safety lessons during a polypropylene plant overhaul to ensure that no accidents will occur once the operations restart.

Teammates are overjoyed at their high score on a safety quiz at Guilin Rubber Machinery. Photo by Li Li

Written exam on safety knowledge conducted during a plant overhaul at Huaxing Petrochemical. Photo by Mou Bingjie,

Wang Qian

Changyi Petrochemical employees taking a safety quiz. Photo by Liu Bin, Liu Xingang

Written exam on safety for middle management at Zhonghao Chenguang Research Institute. Photo by Wang Yude, Chen

Gang.