October 2011

ISSUE 49October

New Starting Point, New JourneyDalian Research & Design Institute Cultivates Employee Loyalty

China International New Materials Industry ExpoWorld's Largest Drying Unit Ready to Go

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Dacheng Lab Works with Dalian Institute and CASBluestar Machinery Anti-bribery CampaignChina Industrial Cleaning Industry Association Set to GoShenyang Paraffin Employee Training

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Chenguang Institute Goes Global as General ContractorHuaxing Petrochemical Coking ProjectFoundation Stone Laid for Haohua Dezhou Industrial BaseBRDIRI Projects Pass Acceptance Checks

Haohua Yuhang Wins National Patent of Invention for New ProcessShenyang Institute of Light Industry Machinery Bottler Granted National PatentsHuaxing Petrochemical Cooler Granted PatentJinan Yuxing Gets Three Utility Model Patents

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ChemChina's Annual Science & Technology MeetingDeputy Chief Human Resources Officer Training

My boss, "Mr. Eric"Elder Sister Mao

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New Employee OrientationInternational New Chemical Materials Summit in ChengduChemChina Finance Customer Satisfaction SurveyBluestar Open its New Website

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Project

5

7

Employee World

2

Technology

Events

October 2011

ISSUE 49 EVENTS

1

China International

New Materials Industry Expo

On September 6 , 2011 , the f i r s t Ch ina International New Material Industry Expo, sponsored by the Ministry of Industry and In format ion Technology (MI IT) and the government of Heilongjiang province, was

launched in Harbin. Zhang Dejiang, vice premier of China State Council, Miao Wei, minister of MIIT, and Ji Bingxuan, secretary of the provincial Party committee, among other leaders, were present at the opening ceremony. Later, Zhang Chunjiang, Vice Premier of China, visited ChemChina's booth. With the theme "New Materials, New Opportunities, New Development," ChemChina's display showcased our achievements in the fields of organic silicon, organofluorine,

high-performance fibers, engineering plastics, high-performance membranes, and various engineering applications.It added a brilliant touch to the expo, while attracting a lot of potential customers. As many as 915 exhibitors from various countries took part in the exposition, including the US, Germany, France, the Netherlands, Russia, South Korea, and Japan. Zhang Dejiang's visit to the ChemChina booth was a clear recognition of ChemChina's success in the new materials business. Zhang spoke with Fan Xiaosen, Vice President of ChemChina and joined other leaders in praising ChemChina's achievements in that field. (Picture shows Fan Xiaosen discussing the developments with Zhang Dejiang and other leaders).

World's Largest Drying Unit Ready to GoThe world's largest revolving steam drying unit came off

the production line in Nanjing, Jiangsu province on Sep 20, and is ready for delivery. Its designed annual capacity

is 4 million tons of CTA/PTA. The machine consists of two dryers that are 4.2 meters in diameter; another two that are 4.5 meters in diameter; and one, 4.8 meters in diameter. The unit was des i gned and fabr i ca ted solely by the Tianhua Institute. It has filled the gap in China in the production of key components for large drying units. It is designed for world-class performance and could help domestic companies cut procurement costs by half. By August, the Institute figured that

it has earned for the government RMB1bn in revenues and saved as much as USD100mn in foreign exchange. The Institute is the only R&D center in the drying and equipment engineering field in China and has been

responsible for as many as 78 R&D projects at provincial and national levels. I t has won two nat ional science and technology awards and 13 provincial awards, and has been granted 51 national patents. It has also played a key role in setting industry standards. N o t c o n t e n t w i t h t h o s e accomplishments alone, the Institute has branched out into other areas such as the coal-based-chemical, steel, non-ferrous metals, power generation, and environmental protection.

October 2011 2

ISSUE 49 EVENTS

ChemChina's Annual Science & Technology

Meeting

ChemChina held its annual science & technology meeting on August 27, 2011 where it presented a summary of its achievements under the company's 11th Five-Year plan and laid out new priorities for the next

five-years. In addition, awards were given to standout groups and individual employees for their excellence in 2010. ChemChina President Ren Jianxin delivered a keynote speech on the importance of science, innovation and core competitiveness in building a top-notch business. In his speech, Ren reviewed the major achievements the company made during the 11th five-year plan period in terms of science & technology investments, the technology innovation system and major projects. According to Ren, ChemChina had increased its support for R&D by 14.5% annually, spending a total of RMB12.45bn during the period. During that time, two major national labs, two engineering research centers, and four national technical centers were put in place and ChemChina was recognized as one of China's

most innovative companies in 2009. Meanwhile, six of its subsidiaries were also recognized for their innovative ability and were designated pilot enterprises. As many as 600 of ChemChina's scientific and technological accomplishments have gained recognition, bringing the company 178 national and provincial awards, eight National Science and Technology Progress Awards, and two second prizes in the Army Innovation Awards. ChemChina has applied for more patents over the last five years, with many of them granted. By the end of 2010, ChemChina had total ownership of 2,822 patents in all, putting it in third place among central SOEs. Laying out the innovation priorities for the 12th five-year plan, Ren spoke about technical investment, regulatory agencies and systems, the science & technology platform, team-building, incentive mechanism, patent work and innovation culture. He underscored ChemChina's overall goal for the period -- building a top chemical business.

Deputy Chief Human Resources Officer TrainingChen Deliang

When Renmin University in Beijing held an opening ceremony for ChemChina's new Deputy Chief Human Resources Officer (DCHRO) course on September 2,

2011, it also marked the start of ChemChina's professional manager training program. In addressing the trainees there for the first session, ChemChina President Ren Jianxin expressed the hope that, given the tight training schedule, they would work hard and familiarize themselves with their future job as soon as possible. He also emphasized the fact that ChemChina was there to provide all the support they needed. On the morning of September 4, the trainees were given a tour of the Chemical Industry Museum of China and had an informal discussion with Ren and various managers where Ren told them that the key to future business success in today's competitive environment lies in building a talented team. In this connection, he said, the DCHROs play a fundamental role in handling corporate change and they, the trainees, are expected to work hard and perform well both in their course and in their future work. Ren said he wanted to drive home the point of just how

important the responsibilities of a DCHRO are in building a business that is competitive and at the top globally: First, build a talented team by adopting hiring and training practices that focus on team building. DCHRO is responsible for appointing CXO (Chief X Officer). Second, improve system building to create a solid human resource system as a sound foundation for management transformations. In conclusion, Ren recommended various learning methods for the trainees and expressed the hope that they would go on to contribute to ChemChina's success.

October 2011 3

ISSUE 49 EVENTS

International New Chemical Materials Summit in Chengdu

Dong Shuping, Lin Li

Sponsored by ChemChina, the local government and DECHEMA, the 4th New Chemical Materials International Summit was held August 25-26 in Chengdu, Sichuan

province with over 300 participants from governmental agencies, industry associations, research institutes and financial institutions. The summit tuned into popular trends, featuring sessions like "Energy, Materials and Success", "Environment, Materials and Life" and "Talents, Innovation and Development". Renowned scientists, experts and top executives were invited to discuss energy, environmental responsibility, talented personnel and other important topics as well as the vital role that new materials play in new energy technologies and the environment. Other topics were scientific and technological

development, new chemical materials uses, and opportunities and challenges in the industry. ChemChina is a cornerstone of China's chemical industry and, based on its new growth strategy, will pay more attention to key products in the new materials sector with significant market demand, and those of strategic importance. Its focus will shift from capacity expansion to product applications. The company will also expand its business from the middle of the value chain to cover both the high and low ends. While branching out into an increasing variety of material applications, ChemChina will spare no effort in creating core industrial chains in the fields of organosilicone, organofluorine, epoxy resins, polyurethane, high-performance fibers and engineering plastics.

ChemChina Finance Customer Satisfaction Survey

Cao Wei

Recently, ChemChina Finance Co., Ltd did a customer

satisfaction survey to solicit input on how to improve its services. All the respondents said they were satisfied with the service as a whole and, as many as 80% said they were really satisfied with the attitude of the people they dealt with. The survey also found that customers are happy with the convenience and efficiency of the online money transfer. Some also have suggestions on how to improve efficiency, streamline the lending process, add other online functions and provide new financial products. ChemChina Finance expressed its commitment to studying the suggestions and improving its services accordingly.

Bluestar Open its New WebsiteJiang Bo

September 1 is Bluestar's 27th anniversary, which means Bluestar people have been actively involved in China's industrial development at home and abroad for 27 full years. On this 27th anniversary, Bluestar finds

itself at a new starting point and, to show a new face to the world, it has opened a brand new website (http://www.china-bluestar.com). The website's functions, designs and segments have been improved to make it more international, with contents plentiful and precise. The website design conforms to international standards and shows Bluestar's status in the industry. The homepage has a blue background, which is consistent with the company's image. Its pages use photos to get their messages across, while the design conveys a grand feeling, guaranteeing a pleasant visual experience. It was built by China Daily, one of China's eight key media websites. In this way, the new Bluestar can benefit from China Daily's current Content Delivery Network (CDN) to make overseas visits smoother. In addition, China Daily's English and French experts can help turn the website into a multi-lingual one. At present, the English website is online, and the French one will be ready by the end of the year.

October 2011 4

ISSUE 49 EVENTS

Dacheng Lab Works with Dalian Institute

and CASSun Fei

A fine chemicals lab established by the Shandong Dacheng Pesticide Co, Ltd, the Dalian Institute of Chemical Physics (DICP), and the Chinese Academy of Sciences (CAS) opened on August 18. Dacheng Pesticide, which was founded in 1949, is a leading pesticide manufacturer while DICP is one of the 100 research institutes that operate under CAS auspices, all of which with strong research capabilities. The new lab is intended to expand research on pesticides and the commercialization of scientific findings by leveraging DICP's technical abilities and Dacheng Pesticide's production reach, while providing technical support for a product upgrading of Dacheng Pesticide.

Bluestar Machinery Anti-bribery Campaign

Zhou Hua

Bluestar Machinery began a company-wide anti-bribery campaign recently to push for fair competition and orderly transactions in national and global markets and to keep the development of the company's operations healthy. The company's Party committee drew up a plan for the campaign, which calls for a task force, headed by the general manager. It will be responsible for organizing and coordinating campaign activities. The plan also specified the steps to take and the priorities for each stage of the campaign. There was also a meeting of Party branch secretaries and a theme session to educate the employees on the campaign's importance. Staff members of local law offices were invited to speak with employees about complying with laws and regulations. The campaign will run through the end of September.

China Industrial Cleaning Industry Association Set to Go

Zhang Li

The Ministry of Civil Administration informed Bluestar Environmental Engineering on August 30 that its request to set up a China Industrial Cleaning Industry Association had been given the State Council's approval and could go ahead with its preparations.

Shenyang Paraffin Employee Training

Shenyang Paraffin Chemical Co, Ltd's CPP Plant has begun a series of diverse employee training programs that are named after various meals. They include the:

Business lunch: this one is handled on the workshop floor and covers troubleshooting, vessel structure, and SHE risk identification. Nutritional meal: this program targets specific posts and combines theoretical knowledge with practical applications, specialized skills, and safety methods. Fun meal: uses a variety of methods to inspire employees to pay more attention to safety. The photo shows a technician lecturing on-site. Photo by Song Lianqin

This means that Bluestar's aspiration of creating a clear sector for cleaning business will become a reality. Association activities will include working for technological advancements in China's cleaning industry, establishing market entry criteria, showing Bluestar's long, painstaking efforts to make advancements in the cleaning industry. Bluestar (Beijing) has already assigned dedicated personnel to get ready and to register at the Civil Administration Ministry's website. The ministry requirements call for an inaugural conference to be held within six months of the start of preparations.

October 2011 5

ISSUE 49 PROJECT

Chenguang Institute Goes Global as General Contractor

He Jin

Zhonghao Chenguang Research Institute of Chemical Industry reached an agreement to be a general contractor on a 15,000t/a inorganic chemical project

for Kazakhstan South Oil Co, on August 26. This is yet another step in the Institute's move to get itself involved in more international turn-key projects and to expand its

Huaxing Petrochemical Coking Project

Liu Jihui, Li Mingjun

markets overseas. The USD55mn, 15,000 t/a inorganic chemical plant is financed by Kazakhstan South and will be built in the city of Karatau, Jambyl Province, Kazakhstan. After having looked over the various proposals of competing offers, the general manager of Kazakhstan South's Talas Investment Company along with two colleagues went to the Chenguang Institute for final contract negotiations on August 25, and signed the contract the next day. The institute has handled more than RMB600mn worth of engineering design and general contracting services, thereby successfully entering the international turn-key project market and further developing its engineering design abilities.

Recently, Huaxing Petrochemical's 1.4 mn t/a delayed coking facility recently produced its first coke, marking

the successful commissioning of the facility on the first try. Now, the company's primary and secondary processing facilities have been improved, its problems with insufficient heavy oil processing capacity have been solved, and production operations have become more flexible, helping to reduce crude oil purchasing costs, increasing the light-oil recovery rate, and improving the overall competitiveness of the company.

Foundation Stone Laid for Haohua Dezhou Industrial

BaseChemChina Haohua's production complex in Dezhou

had its signing & unveiling ceremony on August 16, which will allow Dezhou Petrochemical to expand its business along the value chain of chlorine chemicals. Its old industry base will be relocated to the new one, where Tai'an Salt Industrial Base will be built. The photo shows Dezhou Mayor Chen Xianyun and China Haohua Chemical (Group) Corp President Hu Dongchen at the ceremony. Photo by Li Dongying

BRDIRI Projects Pass Acceptance Checks

Wang Zhengming, Zhang Xinjun

Three Sinopec technology development projects undertaken by the Beijing Research & Design Institute

of Rubber Industry (BRDIRI) and Sinopec Beijing Research Institute of Chemical Industry (BRICI) recently passed their acceptance checks. Qingdao University of Science and Technology was the third partner in one of the projects called "Technical services for synthetic rubber". The other two were "Study of applications of nano-powder rubber in rubber products" and "Performance study of environmentally friendly oil extended SSBR". The SSBR performance study was a systematic inspection of SSBR applications in the formulation of car-tread rubber. The nano-powder rubber study was meant to determine the categories and optimum consumption of superfine powder rubber in modifying tread rubber. The synthetic rubber project involved a market survey, technical discussion, and production and application training.

October 2011 6

ISSUE 49 TECHNOLOGY

Haohua Yuhang Wins National Patent of Invention for New Process

Shua Xuxiang, Jiao Gaocheng

An SG3-type PVC resin production process, developed by Haohua Yuhang Chemical Co, Ltd was patented nationally recently, the third that the company has

been granted since 2009. This process successfully addresses the problems of long polymerization reaction time, low-productivity and low plant capacity in making SG3 PVC resin. It reduces the polymerization time by about 60 minutes without altering

major production conditions and can thus bring the company about RMB8.56mn of additional profits annually. The process was put into mass production in June 2009 with the customers all saying that the product quality and performance were no different from those of low-temperature PVC-SG3 products. In the first half of this year, 178,000 tons of products were produced in total, which were applied in cable material, film and artificial leather.

Shenyang Institute of Light Industry Machinery Bottler Granted National Patents

Sun Hongwei

The National Intellectual Property Office recently gave Bluestar (Shenyang) Project & Research Institute of Light Industrial Machinery patents on a liquid-dosing

bottler, a clamp-type mechanical hand, and an explosion-proof nitrogen-filler for a liquid-bottler. The liquid-dosing bottler has a lever to adjust the height regulator, a straight guide rail, a cylinder and an automatic

weighing device. The mechanical hand's jaw width and angle are determined by an expansion sleeve and are adjustable and suitable for handling packages in a range of sizes. Currently, these patented devices are in use in the titanium white powder packaging and stacking lines of NanTong XingChen Synthetic Material Co., Ltd and Jinan Yuxing.

Huaxing Petrochemical Cooler Granted Patent

Liu Jihui

Shandong Huaxing Petrochemical Group was recently granted a patent by the

National Intellectual Property Office on a new type of circulating water cooler that it developed. The cooler has an automatic backwash ing system for c i rcu lat ing water, marking an industry breakthrough. Moreover, patented at the same time were: a new type of circulating water tank replenishment device; a thermometer for an external combustion furnace; an electric centrifugal pump; an energy-efficient automatic controller; an output device for a nitrogen generator.

Jinan Yuxing Gets Three Utility Model Patents

Chu Yuhui, Xu Lin

Jinan Yuxing was recently given utility model patents on a "Dedicated automatic system for packaging titanium dioxide (TD)", a "Scattering

machine", and a "Plate-and-frame filter press". The three patents are expected to increase the TD output and quality for the company. The "dedicated automatic system" is a new process for automatic packaging of TD and the utility model substantially improves the automation of finished product packaging and could set a precedent for similar products in China.

In TD processing, the raw materials that are ready for the secondary wash tend to be loaded with sediment when entering the re-slurry tank and this "scattering machine" solves the problem through lengthened blades of the agitator in the tank to increase scattering area and intensity. The "plate-and-frame" design prevents a belt conveyer from skidding caused by overloading in the unloading process. It increases both the wrap angle and the friction of the driving wheel while allowing continued use of older driving wheels and belts.

October 2011

ISSUE 49 NEW EMPLOYEE ORIENTATION

7

New Starting Point, New JourneyInduction training is necessary if employees are to understand the corporate culture of their organization and learn to identify themselves with it. Training is also an important way to help each of them mature from a student to a competent employee. All ChemChina companies pay a great deal of attention to training each year to better prepare new employees for the challenges they face in the workplace. The new hydrogenation plant at Shenyang Paraffin Chemical Co., Ltd has spent a considerable amount of time on in-house technical training because its technology and employees are all new. The engineers who are experienced

in plant construction are given the task of preparing training materials and conducting training sessions in a variety of ways in accordance with the skill level and abilities of new employees, which always yielded good training results. Hebei Cangzhou Dahua Ltd has focused on employee training for years now, especially the induction training, which includes an orientation program and a military-type training regime to produce a resilient work style in trainees. Similarly, the construction work on a 1mn t/a PVC plant provided a great opportunity for Guizhou Crystal Organic Chemical Ltd for more effective and efficient employee training. The company held tailor-made training sessions for PVC chemical operators, caustic soda chemical operators, and chemical experiment operators to develop key production workers for the first phase of the project. It was also a breakthrough project intended to help the company out of an operating deficit. So far, 137 employees have taken part in the training and the organic and inorganic chemistry courses have been completed. New production process and safety and environmental protection are now being covered. HDCWTT recently organized three days of induction training for its new employees, yielding good results. Photo by Jiang Jiafei, Sun Tao, Yu Ping, Dong Chuanxi, Xiao Ling.

P h o t o 1 : S h e n y a n g P a r a f f i n e n g i n e e r delivering a lecture to new employees.

Photo 2: Cangzhou Dahua's new employees undergoing military-style training

Photo 3: Guizhou Crystal Organic Chemical's new employees taking a written exam.

Photo 4: New employees visiting the HDCWTT showroom.

Dalian Research & Design Institute Cultivates Employee Loyalty

Zhao Xiaoshu

Dalian Research & Design Institute of Chemical Industry held a workshop on September 2 to explain the history,

latest development and the objectives of the organization's 12th five-year plan. The participants provided a good deal of constructive input on the development of the organization and aligned their career plans with the Institute's blueprint. They also gave their thoughts on how to get people more involved in the organization, improve the academic atmosphere, intensify employee training, and improve living conditions for unmarried employees. On September 8, the organization's leaders joined unmarried employees in celebrating the Mid-Autumn Festival, which made employees feel more at home.

October 2011 8

ISSUE 49 EMPLOYEE WORLD

My boss, "Mr. Eric"Lang Fenglan, Xinghuo Plant Eric Grillon, from France, is my boss as a technical engineer, quality control

manager, production manger, and more recently, quality director. After coming to China, thanks to his rich work experience, he was initially put in charge of Bluestar International Research Institute in Beijing. World travel is a must for Eric especially during holidays, and he has developed the broadest horizon, after having visited many scenic spots and historical sites in many countries. He's familiar with a number of scenic spots in China. In addition to his love of travel, he's a dedicated career man and has a fully packed schedule every hour of every day. Because of his tight schedule, he never shows up at a meeting before the starting time. He's the type of guy who likes racing against time. At work, Eric is well organized and goal-oriented, so he has to draw up a plan and set a deadline for absolutely everything and prioritize things before acting. His key work attitude and habit is perhaps checking on whether he's able to complete all of his tasks on time. He's also a strong team player at work. Once, someone told him jokingly that the Xinghuo Plant was totally dependent upon him to improve work quality. Without even thinking, he immediately replied, "Higher quality work is not something I can accomplish alone! It needs the combined efforts of a big team and that team is all the employees of Xinghuo Plant!" I wish Eric a very successful career and a pleasant stay in China.

Elder Sister Mao

Wang Jinhui, Xinghuo Silicone Plant

Mao Tingting is an extroverted French woman who always finds a way to be popular, no matter where she is. We always feel her passion for

work and life and we love to call her "elder sister Mao". Mao is interested in Chinese culture and her perseverance in learning Mandarin often inspires us. She bought teaching materials on Mandarin and practices it very hard every day. Her vast vocabulary always gives us a pleasant surprise. Mao is rigorous at work and carefully calculates and verifies the figures in datasheets and dimensions in equipment drawings with a magnifying glass at the project design stage. Moved by her meticulous work attitude, we team members began doing the same thing, down to the last detail. Mao is also warm-hearted and is always the first to comfort colleagues if they fall ill. After working together with her over a 320-day period at China Bluestar Lehigh Engineering last year, our friendship deepened. Mao was born in the year of the chicken, according to the Chinese zodiac and, now, she's more than just an elder sister for all of us, especially to me -- she's more like my "mother hen". Whether at work or in relaxation, Mao often teaches me in a hands-on way. Once, after more than two hours of conversation, I told her laughingly, "Sister Mao, I have a talkative mother back home, and now another one here" She replied, "Ha ha, Susan, I am your mother hen," with a big smile on her face. And, as is the case with the mother hen in the eagle-catches-chicken game, Mao looks after me and encourages me. Then, one day, after I had had so much encouragement and support from her, she told me smilingly, "My little rabbit, you've grown up." This spring, Mao was so happy to get a house that the company rented for her. After work every day, she goes to the market for vegetables and to the dairy shop for fresh milk, and chats with the locals in simple Chinese. She always introduces herself proudly to others as a local and fell deeply in love with her new home in a matter of months. I'd like to take this opportunity to wish Sister Mao, my Mother Hen, a pleasant life at Xinghuo and Yongxiu forever!