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Xiao Yaqing: Perform well in Restructuring and Promote Better and Faster Development Of China National Building Materials Group Corporation

2016-08-29

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On August 26, Xiao Yaqing, director of the State-owned Assets Supervision and Administration Commission of the State Council, attended the meeting of Reorganizing China National Building Materials Group and Sinoma Group and inaugural meeting of China National Building Materials Group Co., Ltd., and  listened to the reorganization report and make an important speech. Xiao Yaqing pointed out that we should unify thinking, work together to strengthen leadership, implement responsibility, proceed the re-organization and integration in an active yet prudent, and solid and effective way to ensure that the effect of "1 + 1" is greater than 2, and promote the new company to achieve better and faster development. Zhang Xiwu, Deputy Director of the SASAC Secretary, Yan Xiaofeng, Sectary-General, Luo Han, Ma Liqiang, Chairman of the State-owned Key Enterprise Supervisory Committee and comrades from relevant bureaus of SASAC attended the meeting. Song Zhiping, Chairman of China National Building Materials Group Corporation, reported in the speech the reorganization situation and development of ideas, and Secretary of Party Liu Zhijiang presided over the meeting.


It is of great significance to accelerate the pace of reorganization


Xiao Yaqing pointed out that it was of great significance to accelerate the pace of restructuring of China National Building Materials Group and Sinoma Group in the environment of deepening of the reform of State-owned enterprises. The CPC Central Committee and the State Council attach great importance to the reform and development of state-owned enterprises. On July 4, the National Symposium on State-owned Enterprise Reform was held, and it was proposed that the state-owned enterprises should be strengthened and empowered, steadily enhance the vitality of the state-owned sector of the economy and its capacity to leverage and influence the economy, and preserve or increase the value of state-owned assets, promote the structural adjustment, innovation and development and layout optimization according to the development concept requirements of innovation, coordination, green, open and sharing, so that state-owned enterprises can play a leading role in the structural reform of supply side; follow the laws of the market, make the SOEs become leaner and healthier, improve quality and efficiency, eliminate excess backward production capacity, and promote the structural reform in the supply side. Since 2015, the SASAC had promoted the reorganization of 18 central enterprises to build the relevant industry groups. The reorganization of the CNBM Group and Sinoma Group is the major achievement of resolutely implementing the policy decisions and arrangements of the central leadership  and deepening reform of state-owned enterprises, and actual action and concrete manifestation of making the central enterprises with a competitive edge to grow bigger and stronger and have  better quality, as well as an important measure for optimizing state-owned capital structure, accelerating the construction of world-class enterprises, promoting structural reform in the supply side, and implementing the "The Belt and Road" Strategy and international production cooperation and other national strategies.


The primary task of reorganization is to develop a clear development strategy


Xiao Yaqing pointed out that the development strategy that determines the future direction is the key to the success of reorganization and integration. The primary task for making new group become larger and more powerful is to develop a clear development strategy. The reorganized enterprise should aim at the market, plan the future, set a clear and new strategic positioning, put forward the development objective, key areas, main direction and important initiatives of enterprise in the future period from the  global perspective and the height of industry leader.

The operating income of new Company established from the re-organization of CNBM and Sinoma exceeded more than 300 billion yuan, total assets exceeded more than 550 billion yuan, and production capacities of cement, commercial concrete, gypsum board, glass fiber, wind power blades and other industries are ranked first in the world. In addition, the status of cement and waste heat in the international market will be further consolidated. The new company's future development is committed to becoming a world-class comprehensive materials industry group, a leader in industry consolidation, innovator in industrial upgrading, pioneer in international capacity cooperation, focuses on building six business platforms such as industry platform, international production cooperation platform, new materials, energy and New housing platform, National Materials Research Institute platform, national material resources development platform and financial operation platform.

Xiao Yaqing demanded that, in line with this strategic positioning, the new Company should take the initiative to align with the world-class enterprises and identify the shortcoming and the gap, and develop and implement a series of effective measures in the control of Group, international management, diversification development and collaborative advancement, so that the strategy can be implemented as soon as possible landing and lead the development of enterprises.


Promote the restructuring and reorganization of enterprises and contribute to the supply-side structural reform


The implementation of supply-side structural reform is the strategic plan made by the Party Central Committee and the State Council to grasp the general trend of China's economic development, which is a major innovation to adapt to and lead the new norm of economic development, and an active choice for strengthening overall national strength to compete in the new situation in the post-international financial crisis period The capacities of cement, flat glass, and steel, coal, metallurgy, shipbuilding, nonferrous metals in the current building materials industry are facing a serious excess capacity, severe challenges in the structural problems, which are the priorities in the supply-side structural reform.

Xiao Yaqing demanded CNBM to perform well in reorganization and integration and contribute to the supply-side structural reform. The new Company should on the one hand enhance the industry concentration, address the overcapacity in the building materials industry by the means of staggering peak production, improving standards and reduction replacement, solve the problems of decentralization, redundant projects and other issue in the process of enterprise development, and achieve optimal allocation of resource  in the higher level and enhance the core competitiveness. On the other hand, the new Company should give full play to the advantages of resources and integration of innovative achievements, enhance the development of cement, glass and other traditional building materials products to the high-end, focus on innovating some key basic technologies that impede the development of industry, expand effective and high-end supply, promote the transformation and upgrading of industry  and fully play the central enterprises' role in driving the supply-side structural reform.


Practice the policies of making the SOEs become leaner and healthier and improve quality and efficiency


The policy of making the SOEs become leaner and healthier is the "main prescription" proposed by Prime Minister Li Keqiang for improving quality and efficiency for the central enterprises. Premier Li Keqiang make instructions on the national state-owned enterprise reform forum held on July 4, demanded the state-owned enterprises to follow the laws of the market, become leaner and healthier, improve quality and efficiency, eliminate excess backward production capacity and promote the supply-side structural reform. On July 15, in training courses for central enterprises and local SASAC, he once again arranged how to make the SOEs become leaner and healthier, and improve quality and efficiency.

The restructuring of "Two Material Groups" is a new starting point to strengthen the management and integration of China National Building Materials Group. Xiao Yaqing stressed that the restructured CNBM should vigorously reduce the management level, continuously improve management efficiency, and strive to reduce corporate units 20% within 3 years, compress the management level to 4. CNBM should address the issue of "zombie enterprises" and inefficient assets proactively yet prudently, enhance operational efficiency and asset efficiency. It should also focus on the market, efforts to increase varieties, work to ensure that the quality and brand improve, create famous brands, win large projects, large users and large orders, consolidate the core profit area and continuously improve the profitability. Unique management tools such as "Eight Management Methodologies", "Six-Star Enterprise" and "Increase, Save and Decrease" Method created by CNBM in the path of adhering to the market-oriented should continue to use to enhance efficiency via management and make the SOEs become healthier and thinner.


The pilot of state - owned enterprise reform achieved initial results


In his speech, Xiao Yaqing affirmed CNBM's achievements in deepening the reform of state-owned enterprises and pilots in the past year, and encouraged CNBM to continue to carry forward the excellent quality of venturing to break new ground and being eager to take on challenges, conscientiously do a good job in reform pilot work, create new system, new mechanism and new model that adapt to the market requirement, and continuously enhance the vitality of enterprise development.

CNBM has been a pioneer in state-owned enterprise reform. As early as 2006, CNBM had explored the model of "Central Enterprises-Market" and reorganized with thousands of private enterprise, thus achieving the mixed development. In 2014, the SASAC launched the "Four- Reform Pilot", CNBM was identified as the dual pilot enterprise of developing diversified-ownership economy and implementing the board of directors. Over the past two years, CNBM boldly explored new ways, took concrete action, adjusted strategic positioning, business structure, management and control mode, try to decentralize, adopt mixed ownership, selected and employed talents in the rule of market, and strove to explore the new system, new mechanism and new mode and achieved important milestones.

The current state - owned enterprise reform has entered a critical period. The press conference of SASAC held on July 14 informed SASAC's "Ten Pilot Reforms", and CNBM Group and Sinoma Group, and other three pairs of enterprises were the first carried out the merger and re-organization of central enterprises At present, CNBM is the enterprise that carries out three pilot reforms, and should continue to actively explore and continue to gain valuable experience in the pilot areas


Create a new brand in the process of implementing "Going Global" strategy


The restructuring of CNBM Group and Sinoma Group will create an "aircraft carrier" in China's building materials industry, thus enabling to participate in overseas competition. In accordance with the requirements of the SASAC, in recent years, CNBM Group and Sinoma Group actively participated in implementing the "The Belt and the Road", international production and equipment manufacturing cooperation and other strategy, and bear fruitful results in the process of implementing "Going Global" strategy. CNBM was listed in the Global Top 500 for six consecutive years, and boasted China's largest comprehensive building materials industry group, ranked second in the global building materials enterprises. Sinoma Group, the only enterprise group that has a series of core technologies and complete innovation system in the non-metallic materials industry, ranked No.1 in the international market share of cement technology and equipment for 8 consecutive years. The new company's initial planning investment projects in the countries along "The Belt and Road" reached nearly 100, and the amount of investment totaled up more than 90 billion yuan.

Xiao Yaqing points out that the reorganization is of great significance for the CNBM's entry into the world-class enterprise with international competitiveness, and a milestone in the history of building material. He stresses that the central enterprises are the backbone of the national economy, should closely integrate with the national strategy of "The Belt and Road", promote international production and equipment cooperation by means of leveraging competitive capacity and highlighting the key areas, and take the lead in creating famous brands in the process of implementing "Going Global" strategy.


The key to corporate restructuring is cultural integration


Cultural integration is the key and difficult point for the successful reorganization of enterprises. Only integration can achieve long-term development. CNBM Group and Sinoma Group, affiliated enterprises of original State Building Materials Bureau, have the same source have similar culture, contacts and similar business. In recent years, CNBM had successful reorganized thousands of cement plants and formed a unique inclusive culture. China Sinoma also has an open and inclusive cultural gene in the process of implementing international management. This laid a solid foundation for integrating corporate culture of new Company.

Xiao Yaqing stresses that the integration of culture, compared with other aspects, is more difficult and needs longer process. The integration of CNBM and Sinoma Group ultimately realizes the original idea, develops from "One family" in the form into the "One Dream". In a word, cultural integration is essential. After the reorganization, the two companies should draw each other' strength, learn from each other, work together to develop new vision, new values, new business ideas, new behavior norms, enable majority of workers to enhance value recognition, identity recognition, behavior recognition, thus laying a solid foundation for the business.

CNBM Chairman Song Zhiping said that the State Council SASAC had long been concerned about the reform and development of two building materials enterprises, and gave careful guidance and strong support for the reorganization of "Two Groups". Director Xiao Yaqing's important speech pointed the way for re-organizing CNBM and accelerating the reform and development, and also had important guiding significance. Under the guidance of a clear strategy, all the cadres and workers of CNBM must work together, perform well in restructuring and reform pilot, continue to make the company become healthier and thinner, improve quality and efficiency, speed up the pace of implementing "Going Global" initiative and make new contributions to the supply-side structural reform and begun the march towards world-class comprehensive building materials Group.

 

 


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