Competitive Intelligence Report of Sinopec’s Batam Project
Sinopec, one of the world largest oil companies, started to establish an oil storage project in Batam, Indonesian 2012. This report is made for the Batam local government and aims to analyse and predict the current and future investment of Sinopec. It will also evaluate and predict the influence of the Batam project. The final objective is to provide strategic choices for Batam government.
The data of this report are all from open source. They are from three main aspects which are Sinopec, Batam and international oil industry. The most data are collected from Internet via various search engines such as Google and Discovery. The official websites of Sinopec and Batam has also provided amounts of data. In addition, some existent reports and journals is an important component of this report’s data collection.
In findings, this report firstly analyse the current global expansion strategy of Sinopec. Then in strategic importance of the Batam Project is determined. Based on those two findings, the author justifies the Batam Project and predicts that there will be more similar investment of Sinopec in this area in the future. Moreover, this report also evaluates the predicable influences on local society from Sinopec’s new project. In terms of positive, this project can pull the development of local economy in some aspects such as promoting employment and increasing government income. However, the project is also a potential threat of local environment and the tourist industry.
At the final part, this report provides two strategies to local government. In the industry- oriented strategy, the government is suggested to concentrate on the oil industry development. In the environment-oriented strategy, the author recommends client to restrict this kind of investment and to put the environment at the first place in order to acquire long-term benefits.
China Petrochemical Corporation (Sinopec Group), which is established in July 1998, is a super-large petroleum and petrochemical enterprise group. Sinopec Group is a state-owned company solely invested by the State, functioning as a state-authorized investment organization in which the state holds the controlling share. Headquartered in Beijing, it has a registered capital of £18.2 billion (Sinopec, 2012).
Following the rapidly development of China economy, as one of the most important Chinese state-owned company, Sinopec has significantly increased its market power and influence in international petrochemical market in last decade. Nowadays, it has become one of the largest petrochemical enterprises worldwide and is ranked the 5th in Fortune Global 500 in 2012 (Fortune, 2012). Originally, although Sinopec has great business scale and market value, it has held their most business within China. Compared with its competitors such as British Petroleum and Royal Dutch Shell, Sinopec still has a weaker international market position. However, in recent years, Sinopec start to spread its business overseas. On 10th October 2012, Sinopec announced its Batam Oil Storage Project which located in the West Point Industrial Park of Batam, Riau Islands Province of Indonesia. The project will be built with 2.6 million cubic meters of crude oil and oil products storage facilities, and supporting piers (Sinopec, 2012).
Batam is one of the largest islands in the Riau Archipelago and is actually one of fastest growing tourist destinations in Indonesia (Batam, 2013). Such an investment certainly will have a deep influence on local society. Therefore, as a consultant hired by Batam local government, the author will focus on evaluating and predicting the influence of the new project and, in addition, also provide reasonable strategies to client in order to respond the Sinopec’s investment. Data collection
This report has only sought the open source...
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