Bailian aims at being in world's top 500

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Last updated at: (Beijing Time) Tuesday, October 07, 2003

Bailian aims at being in world's top 500

Bailian, China's leading business conglomerate, has hammered out a development strategy to become part of the world's top 500 enterprises by 2010, company officials say.

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Bailian, China's leading business conglomerate, has hammered out a development strategy to become part of the world's top 500 enterprises by 2010, company officials say.

Under the framework, Bailian will initiate a nationwide expansion with eye on East China, said Wang Zongnan, president of Shanghai Bailian (Group) Company Ltd.

"Our nationwide market will be enlarged by mergers and purchases of provincial businesses. Any other means will be used if they are favourable to our business expansion framework,'' Wang told a press conference last Saturday, the first Bailian has held since its establishment.

Wang revealed that negotiations about mergers are already under way with businesses in North China and East China. "But they are not yet finalized,'' he said.

Bailian was established in April of this year by the merger of Shanghai Yibai Group Co, Hualian Group Co, Friendship Group Inc and Material Group Co, a major logistics company in China.

The merger instantly makes Bailian a key player in that field, and together the four business are worth a total of 33.5 billion yuan (US$4 billion) with sales of 77.8 billion yuan (US$9.4 billion). The firm's target is to reach sales of 120 billion yuan (US$14.5 billion) by 2010 and company officials predict its annual net profits will exceed 10 per cent.

The new State-owned business conglomerate is the result of the city's attempt to push forward the reforms of the existing, local State assets.

According to Bailian Chairman Zhang Xinsheng, the conglomerate has set up eight units including department stores, production companies, real estate agencies, logistics networks, convenience stores, shopping malls and auto sales groups.

Each unit is required to draw up respective business development plans to assist in reshuffling the four merged groups into different but effective sections.

"Some businesses will be reinforced, some will just maintain the status quo and some will be closed,'' Zhang explained.

Supermarkets, department stores and production activities will be Bailian's current three "backbone'' industries, taking up about 80 per cent of its sales, Zhang said.

"Our policy is to create know-how on our own to promote our nationwide department stores,'' he said.

Meanwhile, Bailian will join hands with its domestic counterparts by means of mergers and purchases to reinforce China's department store businesses, he indicated.

As a 100 per cent State-owned conglomerate, Bailian will first appreciate its assets by enlarging its market share before it diversifies its ownership, Zhang said.

"When we are strong enough, we will sell most of our shares to overseas investors and domestic enterprises,'' he said. "That will include private firms.'' According to Wang, businesses from Southeast Asia and Europe are expressing interest in the co-operating with Bailian. "But we are prudent about choosing suitable partnerships,'' he said.

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