1. Company Foundation & Restructuring Background
Beijing Eastern Petrochemical Co., Ltd was officially inaugurated on December 26, 2002 upon approval by the State Council, reorganized from former ethylene-focused affiliates of Beijing Chemical Industry Group via debt-to-equity conversion and asset restructuring. It operated seven subordinate entities: Dongfang Chemical Plant, Organic Chemical Plant, No.4 Chemical Plant, No.2 Additive Plant, No.2 Chemical Plant, Material & Equipment Center and Sales Center. By the end of 2009, the firm had 4,011 on-duty staff and net assets worth RMB 3.179 billion.
The predecessor’s Ethylene Project, a key national construction project of China’s Eighth Five-Year Plan, was completed and put into production in January 1996. Suffering from inherent unreasonable capital structure triggering heavy debt burden, small-scale production units, insufficient raw material supply chain and negative impacts from the Asian Financial Crisis, the project fell into severe operational deficit.
In accordance with central government policies on debt-to-equity swap, the ethylene project was shortlisted for debt restructuring in 1999. Complex asset write-down issues delayed the restructuring for three consecutive years. On September 8, 2002, state council leaders approved special-case handling for asset devaluation and formally endorsed the swap plan.
On December 6, 2002, Cinda Asset Management, China Orient Asset Management and Sinopec Group signed the formal debt-to-equity agreement to set up Beijing Eastern Petrochemical Co., Ltd. Sinopec Group took over overall management rights and entrusted Sinopec Yanshan Petrochemical to operate the whole enterprise on its behalf.
2. Turnaround Performance after Sinopec Restructuring
After incorporation, Eastern Petrochemical imported advanced management systems from Sinopec and Yanshan Petrochemical, rolling out centralized unified administration across finance, procurement and sales departments. Leveraging Sinopec’s competitive edges in raw material supply, capital support, proprietary technologies and operational experience, the company optimized resource allocation and deepened internal institutional reforms.
- 2003: Realized full-company profit turnaround two years ahead of schedule with historic improvement on unit consumption indicators of core chemicals
- 2004: Recorded total pre-tax profit of RMB 980 million, drastically lifting asset quality and return on assets, emerging as a benchmark case of successful state-owned asset appreciation among China’s debt-to-equity swap enterprises
3. Industrial Relocation & Product Upgrade for Beijing Green Olympics (2007)
To fulfill Beijing Green Olympic environmental commitments, optimize municipal industrial layout and build high-standard capital petrochemical base, Eastern Petrochemical pushed forward relocation and technical renovation of Organic Chemical Plant and No.2 Chemical Plant under Yanshan Petrochemical’s guidance starting from 2007. The relocation facilitated comprehensive upgrading in production scale, energy consumption, environmental compliance and R&D capability.
Post relocation, the group owned over 20 production lines manufacturing more than 30 chemical grades across six product series. Key designed annual capacities are listed below:
- Ethylene: 160,000 MT
- Acrylic acid: 75,000 MT
- Equivalent Ethylene Oxide: 65,000 MT
- Vinyl Acetate Monomer (VAC): 180,000 MT
- VAE Emulsion: 100,000 MT
- EVA Copolymer Resin: 40,000 MT
- Standard & UHMWPE: 20,000 MT
- Butanol & Octanol (2-Ethylhexanol): 77,500 MT
Its core production lines for acrylic acid & esters, VAC and UHMWPE maintained top-tier technical and economic benchmarks nationwide. The company owned multiple Beijing Famous Brand trademarks including Yunyan, Huabiao, Shanying and Meihua; flagship competitive products covered EVA resin, VAE latex, high-purity acrylic acid and ultra-high molecular weight polyethylene.
On September 4, 2009, Beijing Eastern Petrochemical became a wholly-owned subsidiary of Sinopec Yanshan Petrochemical. Starting from 2012, in line with Beijing urban development planning and Sinopec’s group-wide deployment, all subordinate production subsidiaries phased out petrochemical manufacturing sequentially.
4. Detailed Introduction of Five Core Production Subsidiaries
4.1 Dongfang Chemical Plant
A large-scale modern petrochemical manufacturer situated alongside ancient Grand Canal in Tongzhou District, Beijing, founded in 1978 with total site area of roughly 1,920 mu, around 2,000 employees, original fixed asset of RMB 4.8 billion and total assets of about RMB 3 billion. Its core production units including 380,000 MT/year VAC plant, 27,000 MT/year PVA plant and 40,000 MT/year EVA plant were successfully commissioned after relocation near Yanshan Mountain.
4.2 No.4 Chemical Plant
Founded in 1956, covering 750 mu with 714 regular workers and seven production & auxiliary workshops. Its flagship butanol-octanol unit was imported from Japan and the US in 1994 featuring world-class 1990s process technology. Rated annual output: n-butanol 20,000 MT, isobutanol 7,500 MT, 2-EH 50,000 MT complying with global manufacturing standards. Its Shanying-brand octanol won Beijing Famous Product certification in 2000. Supporting facilities include air separation, thermal power, water supply, tank storage, dedicated railway and underground pipeline network.
The plant obtained ISO9002 certification in 2000 and was honored as National Advanced Environmental Enterprise. Optimized stable operation enabled seven consecutive years of rising output, exceeding 100,000 MT in both 2007 and 2009 while cutting unit consumption of propylene, heavy fuel oil and utility to domestic leading level. Production was fully suspended in 2014 per group’s unified arrangement.
4.3 No.2 Additive Plant
China’s sole domestic producer of special-grade HDPE powder relying on independent proprietary technologies, specialized in HDPE for CPE modification and UHMWPE with total annual capacity of 20,000 MT. Its 10,000 MT/year UHMWPE production line ranked third globally after Germany’s Ticona and US-based manufacturers with superior domestic product quality.
Since early 1980s, the plant independently developed polyethylene manufacturing from intermittent batch process to continuous production and upgraded catalyst from low-efficiency grinding type to high-performance catalytic formulation. Registered under Meihua trademark, core product portfolio includes general HDPE, CPE-specified HDPE, UHMWPE and polyethylene wax. Decades of technical optimization secured over 90% domestic market share with goods exported across Europe, America and Asia. Production shut down after 2012 under group’s overall planning.
4.4 No.2 Chemical Plant
Established in 1958 with long-standing contribution to Beijing’s industrial development. All production lines ceased operation in November 2007 for Beijing Olympic environmental improvement. Full staff resettlement finished in June 2009 covering 1,383 incumbent workers. The legal entity name and management department were retained, managing over 1,000 pre-retirement and laid-off staff plus more than 3,000 retired employees via four functional divisions: ethylene pipeline inspection, general administration, party affairs and logistics management.
4.5 Material & Equipment Center | Sales Center
- Material & Equipment Center founded in March 2007, responsible for group-wide raw material, spare part procurement and warehouse management during factory relocation. It realized standardized centralized purchasing, unified inventory and consolidated settlement via dedicated ERP material resource management system with full digital procurement workflow.
- Sales Center set up in September 2007 to implement group unified sales strategy, building professional marketing team aligned with modern corporate governance and market-oriented operation.
After successive factory shutdown starting from 2012, both centers underwent asset consolidation, institutional cancellation and staff reassignment via vocational training or proper placement.
