Yongcheng Coal & Elec aims to 30 bln yuan sales revenue this year

Yongcheng Coal & Electricity Group Co Ltd, based in Yongcheng of Central China's Henan Province, plans to increase our sales revenue to 30 billion yuan, with a profit of 3.5 billion yuan by the end of this year, reported China Daily, citing president Chen Xuefeng.

Yongcheng Coal & Electricity is now one of China's leading coal manufacturers, with around 2.03 billion yuan of profit generated in 2006 from a loss of 120 million yuan in 2000, said Chen.

Last year the company produced 13.21 million tons of coal equivalent, compared with 2.08 million tons in 2000. Its coal production has seen year-on-year growth of 36.08 percent.

The company is looking to mines outside the province in Guizhou, Shanxi and Shaanxi provinces, and the Inner Mongolia and Xinjiang Uygur autonomous regions, due to the insufficient coal resources in Henan.

It bought coal mines in Guizhou with nearly 3 billion tons of capacity, and coal projects in the province will be able to produce 15 million tons of coal a year, Chen said.

The company is also widening its business from coal manufacturing to the coal-to-chemical business, metals, power generation and machinery manufacture.

"This year we aim to increase our sales revenue to 30 billion yuan, with a profit of 3.5 billion yuan," he said.

The company's sales revenue has increased from 487 million yuan in 2000 to 21.8 billion yuan in 2006 - that's year-on-year growth of 87.32 percent.

Innovation has played a pivotal role in the company's growth, such as the use of a coal equivalent standard to improve coal quality, the updates in coal extraction machinery to increase production efficiency, and made our business strategies more market-oriented.

Meantime, Yongcheng Coal & Electricity has forayed into many new areas like coal-to-chemicals, metals and power generation.

It started its coal-to-chemical business in 2005 and is set to begin production this year, by using its good raw material anthracite to produce methanol and olefin, etc. This project is "one of seven coal-to-chemical bases in China", according to Chen.

The company has begun phase II of the coal-to-chemical project, which will be able to produce 500,000 tons of methanol a year using technology from Royal Dutch Shell.

Yongcheng Coal & Electricity is also developing its power generation and metals businesses. It has cooperated with companies like China Resources to develop power plants and has begun manufacturing aluminum, molybdenum and vanadium.

In 2006, the company's sales revenue from metals business reached around 5 billion yuan, and it plans to have an installed power capacity of 4,000 megawatts in five years.

Chen says collaboration with other companies is another important means of developing the company. Yongcheng Coal & Electricity began working with other firms in 2003, when it struck a coal supply deal with China's largest steel company Baosteel, and signed a coal production agreement with Brazilian mining giant CVRD in 2004.

Yongcheng Coal & Electricity now has over 40 projects under way in partnership with other companies, Chen said.