(Hong Kong, 18 Oct 2024) China Risun Group Limited (“China Risun”, or the “Group”, stock code: 1907.HK), a leading global integrated coke, coking chemicals and refined chemicals producer and supplier and relevant operation management services provider in China, gladly announced steady expansion of its operation management services.
China Risun’s operation management services encompass various aspects, including overall trusteeship, marketing integration, supply chain management, park planning consulting, product line planning, production, technology, logistics, environmental protection, safety, research and development, and digital enhancement, covering multiple upstream and downstream industries such as coking, chemicals, and new energy. Operation management services at China Risun Group integrate, consolidate, refine, and replicate the advantages and experiences from Risun's coking and fine chemical industry. This service is dedicated to empowering the industry and facilitating the company’s business expansion and conducted in three different models:
Three Operation Management Service Models:
1. Production Technology Management: This model focuses solely on production technology management.
2. Sales Integration Management: This model handles only the sales operations.
3. Comprehensive Management: This model oversees the entire process including sales, transportation, production, and supply.
These three models together form the unique operation management service offered by Risun, enabling asset-light scale expansion, accelerating and strengthening industry integration, generating additional revenue, and selecting high-quality assets for mergers and acquisitions.
Updates (Q3 2024):
July 2024: Signed a cooperation agreement with Wuhai Guangna Coking Co., Ltd. for unified sales of its coke products.
September 2024: Signed a cooperation agreement with Sichuan Energy Investment Wangcang Coking Co., Ltd. to provide comprehensive management of its coking production operations, including but not limited to coke product sales, chemical product sales, coking coal procurement, coal blending management, and transportation management.
These new collaborations have expanded Risun's operation management service capacity to 7.06 million tons per year, including 6.4 million tons of coke and 660,000 tons of refined chemicals.
Key Projects under Operation Management business segment in 2024:
• Coke Projects:
1. Ningxia Wuzhong Tongda Coal Chemical Co., Ltd. (2.6 million tons/year)
2. Henan Luoyang Longze Energy Co., Ltd. (1 million tons/year)
3. Shandong Jining Coal Chemical Co., Ltd. (1.2 million tons/year)
4. Inner Mongolia Wuhai Guangna Coking Co., Ltd. (1 million tons/year)
5. Sichuan Energy Investment Wangcang Coking Co., Ltd. (600,000 tons/year)
• Refined Chemical Projects:
1. Henan Haixing Chemical Technology Co., Ltd. (300,000 tons/year tar deep processing)
2. Jilin Connell Chemical Co., Ltd. (360,000 tons/year aniline production)
Core Competence and Growth:
Leveraging China Risun's unique core competencies and operation management system, the company is gradually forming new growth areas. China Risun’s ability to rapidly develop operation management services lies in its industry-leading safety and environmental standards. China Risun's industrial parks annually host over 800 safety and environmental benchmarking visits. The Group is also a pioneer in implementing and fully achieving prepayment sales strategies, creating an industry breakthrough. This strategy ensures ample profitability and cash flow, driving China Risun's transformation from a manufacturing enterprise to a service-oriented manufacturer, ensuring first-class products and services for customers, and strongly supporting the benefits of operation management service partnerships.
Integrated Approach:
China Risun’s operation management services have developed a complete system, methodology, policies, and processes, from identifying opportunities to negotiating cooperation, taking over operations, improving standards, and meeting Risun’s operational benchmarks. This has brought significant changes to Risun, enriching its industrial portfolio, expanding market space, optimizing asset allocation, enhancing capital returns, and improving the ability to navigate industry cycles.
Pre-M&A Operation Management:
Operation management services can precede potential M&A projects, mitigating risks of incomplete due diligence and addressing post-acquisition integration issues in advance. This ensures successful mergers and acquisitions, broadens the scope of M&As, and facilitates the creation of solutions that meet various stakeholder demands.
Future Strategy:
As China Risun continues to expand its operation management services in the coking, chemical, and new energy sectors, it will leverage the significant advantages of these services to identify suitable assets for mergers and acquisitions, supporting the nationwide and global expansion of China Risun’s business.
Strategically, China Risun will continue to focus on planning investments in existing park projects and external M&A investments while increasing investments in operation management services. This will enhance the contribution of these services to the Group’s total revenue, profit, and scale, optimizing the business structure, increasing asset-light configurations, and promoting high-efficiency and high-quality growth for the Group.
