En­ergy com­modi­ties trader Mer­cu­ria set on China ex­pan­sion

China Daily (Hong Kong) - - BUSINESS - By YUAN SHENGGAO

Swiss trad­ing com­pany Mer­cu­ria has achieved a solid and sta­ble pres­ence in China, this year mark­ing its 11th an­niver­sary of spon­sor­ing the Bei­jing Mu­sic Fes­ti­val.

As a transna­tional en­er­gy­fo­cused com­modi­ties group, Mer­cu­ria said it aims to de­velop with a ge­o­graph­i­cal bal­ance be­tween Asia, the Amer­i­cas and Europe.

Marco Du­nand, CEO of Mer­cu­ria, said: “Mu­sic is a good bridge be­tween dif­fer­ent parts of the world. While BMF has an ex­tremely strong clas­si­cal mu­sic team, it also has al­ready been one of the top 10 mu­sic fes­ti­vals all over the world.

“So we are con­fi­dent that BMF will be the bridge to con­nect Mer­cu­ria and China to help us to un­der­stand each other bet­ter.

“The ta­lent, his­tory and cel­e­bra­tion of the cul­tures where we op­er­ate are core to our busi­ness model. Just like Mer­cu­ria, the mu­sic fes­ti­val has a strong and deep con­nec­tion with China and the tal­ents of the Chi­nese peo­ple, but also cel­e­brates ex­per­tise and his­tory from around the world.”

Mer­cu­ria be­lieves in cor­po­rate so­cial re­spon­si­bil­ity and in giv­ing back to the com­mu­nity, in­clud­ing its spon­sor­ship of the mu­sic fes­ti­val.

In the past decade, Mer­cu­ria has formed strong strate­gic re­la­tion­ships with many pi­o­neer­ing play­ers in nu­mer­ous in­dus­tries, such as China Na­tional Chem­i­cal Corp, also known as ChemChina, and China Na­tional Ma­te­ri­als Stor­age and Trans­porta­tion Corp, or CMST.

In 2016, the com­pany re­ceived a strate­gic in­vest­ment from ChemChina, al­low­ing Mer­cu­ria to gain ac­cess to its ex­per­tise and

The Belt and Road Ini­tia­tive pro­posed by Chi­nese gov­ern­ment is wise enough to con­nect all the coun­tries in­volved.”

Marco Du­nand,

global reach. Com­bined with its own ex­pe­ri­ence, Mer­cu­ria has since fu­eled and di­ver­si­fied its or­ganic growth.

As the big­gest lo­gis­tics com­pany in China, CMST as­sists Mer­cu­ria in bring­ing in­ter­na­tional stan­dards used on the Lon­don Metal Ex­change to China.

Since Chi­nese doc­u­ments, cer­ti­fi­ca­tion and reg­u­la­tions are dif­fer­ent from other coun­try’s, Mer­cu­ria needs a fully pro­fes­sional com­pany such as CMST to se­curely im­port met­als.

CMST has an ex­ten­sive port­fo­lio of lo­gis­tics as­sets and land hold­ings in pre­mium lo­ca­tions across China, al­low­ing Mer­cu­ria to ex­pand its busi­nesses in China and drive its growth.

“Over the last 13 years, our re­turn on eq­uity has been around 10 to 25 per­cent per year. It is by no mean feat that we have never had a neg­a­tive year,” ac­cord­ing to Du­nand.

Look­ing ahead

Re­gard­ing the com­pany’s de­vel­op­ment prospects in China, the CEO said that he is happy to see that the 19th Na­tional Congress of the Com­mu­nist Party of China sig­naled that China will fur­ther open-up and in­te­grate with the in­ter­na­tional mar­ket.

“It is def­i­nitely a pos­i­tive move­ment,” Du­nand said.

“Over the past decade, Mer­cu­ria has ac­cu­mu­lated a great deal of ex­pe­ri­ence col­lab­o­rat­ing with Chi­nese com­pa­nies, banks and gov­ern­ments.

“For in­stance, Mer­cu­ria has founded two joint ven­tures with Sinopec and ChemChina, and has found two share­hold­ers in ChemChina and China Re­form Hold­ings Corp. So, I am con­vinced that, com­bined with its in­ter­na­tional ex­per­tise and ex­pe­ri­ence, Mer­cu­ria’s de­vel­op­ment in China is promis­ing enough.”

Mer­cu­ria is proac­tively look­ing for new op­por­tu­ni­ties in China, so as to en­sure strong growth mo­men­tum.

“The Belt and Road Ini­tia­tive pro­posed by Chi­nese gov­ern­ment is wise enough to con­nect all the coun­tries in­volved. Ev­ery com­pany can find its own busi­ness op­por­tu­nity.

“From my per­spec­tive, with deep knowl­edge of lots of those dif­fer­ent coun­tries, Mer­cu­ria maybe can play a role as a co-in­vestor to par­tic­i­pate in this ini­tia­tive,” Du­nand said.

In fact, Mer­cu­ria has been in touch with many Sta­te­owned in­vestors and sev­eral banks to dis­cuss how to take part in and con­trib­ute to the Belt and Road Ini­tia­tive.

Yet, chal­lenges are in­evitable when forg­ing ahead into new ter­ri­tory.

One of the big­gest chal­lenges, not only for Mer­cu­ria, but also for the en­ergy mar­ket in gen­eral, is the on­go­ing tech­nol­ogy revo­lu­tion.

“As we can see, we have some re­new­able en­ergy such as so­lar en­ergy and wind en­ergy, which are be­com­ing cheaper to pro­duce. So it is ex­tremely ur­gent for the tra­di­tional en­ergy in­dus­try to up­date its tech­nol­ogy,” he ex­plained.

The CEO added that tech­no­log­i­cal change is hap­pen­ing at ev­ery level of the busi­nesses.

“It is a big chal­lenge but also a big op­por­tu­nity. By up­dat­ing its own tech­nol­ogy and in­te­grat­ing with the re­new­able en­ergy in­dus­try, Mer­cu­ria is will­ing to help other com­pa­nies to re­struc­ture and to bet­ter un­der­stand tech­no­log­i­cal change,” Du­nand said.

He added that China is def­i­nitely mov­ing in the right di­rec­tion in terms of in­no­va­tion, by in­creas­ingly openingup and proac­tively work­ing to in­te­grate with the rest of the world. China has al­ready be­come the world leader in terms of the econ­omy and many other in­ter­na­tional af­fairs, he said.

To look for new sup­plies of en­ergy from shale in Ar­gentina, Mer­cu­ria, this year, teamed up with An­des En­er­gia.

This was re­ported in China Watch which ap­pears in UNO News­pa­pers; La Cap­i­tal Rosario and El Cro­nista Comer­cial, Mer­cu­ria and An­des an­nounced the cre­ation of Phoenix Global Re­sources plc from the com­bi­na­tion with Petrol­era El Trébol S.A.

Phoenix is now an in­de­pen­dent ex­plo­ration and pro­duc­tion com­pany with a bal­anced port­fo­lio of as­sets in both Ar­gentina and Colom­bia. It has been ad­mit­ted to trad­ing on Al­ter­na­tive In­vest­ment Mar­ket of the Lon­don Stock Ex­change, the ex­change’s in­ter­na­tional mar­ket for smaller grow­ing com­pa­nies.

“The elec­tion of Ar­gen­tine Pres­i­dent Mauri­cio Macri in 2015 has in­creased our con­fi­dence in in­vest­ing in the coun­try. The com­pany has over 4 mil­lion li­censed gross hectares in Ar­gentina, 61.7 mil­lion bar­rels of oil equiv­a­lent net work­ing in­ter­est of proven and prob­a­ble re­serves and pro­duc­tion of over 11,300 net work­ing in­ter­est bar­rels of oil equiv­a­lent per day on av­er­age in 2016. This has tremen­dous prom­ise,” said Du­nand.

Although China does not have the magic an­swer to solve ev­ery prob­lem at once, its tech­nol­ogy has al­ready be­come much more ad­vanced than many other coun­tries’, and it is this ad­vanced tech­nol­ogy that will pro­vide a short­cut for China’s de­vel­op­ment, ac­cord­ing to Du­nand.

WANG ZHUANGFEI / CHINA DAILY

The Mer­cu­ria Night is held on Oct 23, as the sec­ond event of the Beethoven Cy­cle II at the Bei­jing Mu­sic Fes­ti­val. The con­cert was con­ducted by renowned di­rec­tor Paavo Jarvi and per­formed by Deutsche Kam­mer­phil­har­monie Bre­men.

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