Sinopec H1 non-fuel sales soar

China Daily (USA) - - BUSINESS - By LYUCHANG lvchang@chi­nadaily.com.cn

Chi­nese oil and gas com­pany China Pe­tro­leum and Chem­i­cal Cor­po­ra­tion, or Sinopec, saw its non-fuel sales surge 43 per­cent in the first half of this year amid fall­ing crude oil prices.

The Bei­jing-based com­pany’s non-fuel prof­its rose 42 per­cent from Jan­uary to June, while sales of its retail oil prod­ucts grew 3.1 per­cent dur­ing the same pe­riod, Sinopec said onMon­day.

“We have with­stood the se­vere chal­lenge in a re­ally tough mar­ket, strength­en­ing our con­ve­nience store busi­nesses and di­ver­si­fy­ing into a com­pre­hen­sive ser­vice provider,” Sinopec said in a state­ment.

The re­sult came as the com­pany sought to drive non-fuel sales across its ex­ten­sive net­work of ser­vice sta­tions.

Liu Xinzhang, an an­a­lyst at com­modi­ties con­sul­tancy Sub­lime China In­for­ma­tion Co Ltd, said non-fuel busi­ness is be­com­ing a new profit growth point for oil ma­jors es­pe­cially when their core busi­nesses such as oil pro­duc­tion and re­fin­ing are fac­ing down­ward pres­sure.

“The State-owned gas sta­tions are all speed­ing up ef­forts to be­come a ser­vice sup­plier, sell­ing not only oil prod­ucts but also fast-food, in­sur­ance and other auto ser­vices,” he said. “Clearly, the trans­for­ma­tion will bring more prof­its amid the coun­try’s push to­wards mar­ke­to­ri­ented op­er­a­tions.”

The top Asian re­finer has set up a retail com­pany Sinopec EasyJoy Sales Co Ltd to run 24,000 chain stores and other re­lated as­sets, in­clud­ing auto ser­vices, at its more than 30,000 ser­vice sta­tions across China.

Mean­while, Sinopec has co­op­er­ated with in­ter­na­tional fast-food gi­ant Mc­Don­ald’s Corp to set up about 300 auto ser­vice sta­tions of­fer­ing fast­food choices.

It also signed a strate­gic agree­ment with Zhong­bai Hold­ings Group Co Ltd, a ma­jor chain store owner in China’s cen­tral and western prov­inces, invit­ing the su­per­mar­ket to set up out­lets in Sinopec’s gas sta­tions.

The State-owned com­pany said it wel­comes dif­fer­ent forms of co­op­er­a­tion with e-com­merce com­pa­nies in its busi­ness, rep­re­sent­ing a fur­ther open­ing up to pri­vate cap­i­tal.

At the same time, com­pe­ti­tion has in­ten­si­fied as more Chi­nese oil com­pa­nies are de­ter­mined to put more fo­cus on their non-fuel busi­ness amid a slump in crude oil prices.

Though not as large as Sinopec’s non-fuel sales, China Na­tional Pe­tro­leum Corp is also ex­pand­ing its non-fuel sales with an aver­age growth of more than 20 per­cent yearon-year.

It said last year that con­sumers can pay at about 1,500 gas sta­tion through WeChat Pay­ment, the mobile pay­ment so­lu­tion de­vel­oped by Ten­cent Hold­ings Ltd, China’s in­ter­net gi­ant.

HU QINGMING / FOR CHINA DAILY

Two em­ploy­ees stack items at an EasyJoy con­ve­nience store in Jingdezhen, Jiangxi prov­ince.

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