Investment firm drafts ambitious blueprint

China's largest State-owned investment holding company has drafted an ambitious plan to develop itself into a world-leading investment holding company in 10 years.

To realize the goal, the State Development and Investment Corp, one of the 50 largest State-owned enterprises directly under the leadership of the Chinese Government, will vigorously develop its overseas investment business in the coming 10 years. China Daily reported Thursday.

Company President and Chief Executive Officer Wang Huisheng said in a recent interview that to become a first-class international investment holding company, about 20 per cent of his company's annual investment will be invested in overseas markets.

Wang predicts the establishment of close ties with foreign companies in setting up joint investments abroad. Such investment will focus on resource-related sectors, such as coal and minerals.

To quicken its step in overseas investment, the company is also looking into exploring new types of co-operation with foreign partners, such as using its share in domestic enterprises as leverage or exchange for shares in projects abroad.

The company may take a strategy not to pursue a holding share in foreign projects, Wang said.

In addition to overseas investment, the company will also make efforts to develop its domestic projects to reach a top international standard while fostering a world-class management team, he said.

Established in 1995 with a registered capital of 5.8 billion yuan (US$7 million), the company has experienced rapid growth in the past nine years. By the end of 2003, its total assets soared to 76.8 billion yuan (US$9.28 billion).

Having laid a solid basis for further development, the company has worked out a plan to increase its assets to 110 billion yuan (US$13.3 billion) in 2007 and 220 billion yuan (US$26.6 billion) in 2012, Wang said.

Also, the company's total installed electricity generating capacity will be increased from the current 15 million kilowatts to 57.8 million kilowatts and its coal production will be raised from the current 13.7 million tons per year to 50 million tons in 2012.

At present, the company has four major business areas: industry, finance, consulting and asset management.

In the industrial sector, its investment is mainly focused on electricity generation, coal mining, port infrastructure, high-technology, automotive spare parts and chemical fertilizers.

The company is preparing for the launch of a number of large projects in the near future in the energy resources, transportation and chemical fertilizer sectors.

The company plans to play an important role in guiding investment into areas encouraged by the central government, such as energy resources and projects related to agriculture and the West China region, Wang said.

For instance, the company is a major shareholder of the Ertan Hydro Power Station. Located in Southwest China's Sichuan Province, Ertan Hydro Power Station has an installed electricity generating capacity of 3.3 million kilowatts.

In selecting investment projects, he said, the company sticks to the following principles: investment in infrastructure and resource sectors and high-tech sectors which are encouraged by the central government; investment in sectors with large market potential; and investment in areas where the company has competitive advantages.

(China Daily)