More than just business

Maersk Line and Chinese conglomerate Sinochem have been business partners for years, but their partnership is also a consultative one, with mutual learning from each other to grow with their respective global strategies.

Maersk Line
At one of Sinochem’s production facilities in Yangzhou, China, chemical testing for fertiliser compounds are carried out, and final agro-chemical products manufactured are shipped to overseas destinations.

Maersk Line and Sinochem

  • Maersk Line’s five-year partnership with Sinochem involves mainly the export of chemical products, of which Sinochem is number one in China.
  • Maersk Line now handles 40% of Sinochem’s exports, totaling 2,000 FFEs (fifty-foot equivalent) in 2014, with a goal to increase this to 5,000 FFE, targeting a contract on raw materials import from Brazil.

When Maersk Line sales manager Allen Tu deals with his key client Sinochem, he sees them as more than just customers. “We’re just like close friends – we respect each other’s values and have a shared vision and commitment to what we’ve agreed to work on,” he describes.

In fact, Tu, who handles key client management for the Eastern China cluster, has even been invited to Sinochem’s mid-year conference to share knowledge on Maersk Line’s sales system that Sinochem’s management hopes to adapt for their global sales.

Going global with Sinochem
Sinochem is a state-owned Chinese conglomerate with investments in energy, agriculture,
chemicals, real Estate, and finance. Besides being a Fortune 500 company, it has more than 300 subsidiaries inside and outside of China and about 50,000 employees worldwide.

Poster image
Watch the video about Sinochem International 2:43

Changing with China

With Chinese consumption on the rise, imported food is in high demand. To illustrate this trend, a northern Chinese fruit importer and a New Zealand meat and dairy exporter have seen volumes climb sharply.

According to Qiao Wei, Deputy General Manager of SinoChem International Corporation, their main target is to be the world leader in agro-chemicals by 2020. He says: “We are among the first Chinese companies that started the ‘going global’ process with a global strategy. Our businesses cover Europe, South America, North America, Middle East and we’re also looking towards Africa.”

Adds Qiao: “Because SinoChem does not have its own fleet, what we require is a long term logistics partner that has the same strategic goals as us. Cooperating with Maersk has improved the efficiency of our operations, and facilitated the development of SinoChem’s business. We hope to build up China’s chemical industry to meet international benchmarks, and are actively advocating for environmentally friendly standards for the agro-chemical industry in China.”

According to Tu, volumes carried by Maersk Line for Sinochem have seen a 138% increase from 2014 to 2013, and look set to go up further.

Providing a consultative role

The Maersk Line – Sinochem partnership extends beyond shipping as both companies are growing together with the potential of expanding into future markets, with constant communication between high level executives from both sides, starting from the strategic partnership agreement signed between Sinochem and the Group CEO five years ago.

Allen Tu explains: ‘We are not selling a product to them. We are acting as consultants – providing solutions to meet their future growth and help them expand globally with us as their partner. In short, we are not just doing business here, we are sharing knowledge.”

This synergy extends to the sharing of management concepts and tools regarding logistics handling, and joint calls with Sinochem’s customers and vendors in Egypt, Korea and Brazil.

Qiao Wei sums it up: “I believe there will be more sectors where Maersk Line and SinoChem can cooperate, especially as we expand our business reach. Since both groups are Fortune 500 companies, it’s a win-win situation. This is what we would like to see.”

“We believe that it is a partnership between two very competent companies.”

Maersk Line Allen
Maersk Line sales manager Allen Tu (left) and Qiao Wei, Deputy General Manager of SinoChem International Corporation (right). The partnership between both companies is a strategic one hinging on similar values and growth strategies.

Chinese brands go global

While China has been the world’s largest exporter for years, the contents of the containers departing from the People’s Republic are now undergoing a subtle yet significant change. From producing goods for foreign brands, Chinese manufacturers are now increasingly producing for their own and taking them global.

The Chinese connection
China’s potential for logistics partners like Maersk is immense, with a third of all containers exported worldwide coming from that country. Six out of 10 of the world’s largest container terminals are in China. This sets the stage for how Maersk can assist and grow with Chinese companies in their strategy to go global, such as in the case of Sinochem.

  • Last year, the Maersk Group released a China Impact Assessment showing that Maersk Line alone contributes to 0.8% increase in Chinese exports by increasing its services and capacity by 10%.
  • Since 2000, Chinese imports and exports have grown by around 600%, with container volumes going through Chinese ports growing by around 500%.
  • The study also concluded that China is better connected by container shipping than any other country.

liner coonectivity
China is better connected by container shipping than any other country, which highlights the vast potential for Chinese firms to go global. The Liner Connectivity index is a measurement used in Maersk’s China Impact Study, and is defined by the access to regular and frequent liner services and the level of competition among shipping lines.

For more information on the China Impact Study, click here.