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Staff crunch
By JIN JING (China Daily)
Updated: 2007-09-24 07:17
Finding and keeping good p
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Chinese companies at a glance
(China Daily)
Updated: 2007-09-24 07:18
First liquid fuel
China's largest coal company, Shenhua Group, will produce the country's
first barrel of liquid fuel from coal in 2008 using proprietary
technology.
"We have finished 95 percent of the engineering projects at the first
production line in Erdos in North China's Inner Mongolia Autonomous
Region. The line will start making liquid products next year in trial
operation," says Zhang Yuzhuo, who is in charge of Shenhua's coal
liquefaction business, during the China International Coal and Energy New
Industry Expo 2007 last week in Taiyuan.
Zhang said the first production line would use 3.45 million tons of coal
every year to make 1.08 million tons of liquid products, including diesel
oil, liquefied petroleum gas and naphtha.
Oil imports have risen recently to fuel China's booming economy, spurring
the nation to look for technologies that can turn some of its coal
reserves into fuel and other chemicals. Indirect-liquefaction technology
was first developed more than 70 years ago. It has been commercialized by
South Africa's Sasol Ltd, the world's biggest producer of motor fuel from
coal. The direct-liquefaction technology used by Shenhua, however, hasn't
been industrialized until now. Shenhua has improved production flow,
built larger facilities and developed its own technologies, Zhang says.
Cartoon humidifier
Beijing Yadu Indoor Environmental Protection Science & Technology Co Ltd,
the Beijing 2008 Olympic Games Air Humidifier & Purifier Exclusive
Supplier, recently said that it has signed a strategic cooperation
agreement with cartoon giant Walt Disney.
Under the agreement, Yadu will be authorized by Disney to use well-known
Disney cartoon images on Yadu's electronic home appliances, including
Mickey Mouse and Aladdin. Yadu will begin by adding Disney's Mickey Mouse
and Winnie the Pooh into the figure design of its flagship products.
This October, Yadu and Disney will jointly launch a nationwide promotion
initiative with theme of its Disney cartoon image humidifiers. After the
first five series of cartoon humidifiers hit the market, the two parties
will further cooperate on adding more Disney cartoon elements into the
small home appliances. Different from other authorization, Disney will
also provide support on the retail distribution network and product
design and development to Yadu.
Beijing-based Yadu is the first Chinese company to tap into the
humidifier and purifier industry, occupying more than 95 percent of
domestic market share. It takes up the second position in the
international air quality industry and holds over 70 percent of the core
technology in the segment.
Game competition sponsorship
Sina, China's leading online media company, announced last Tuesday that
it has joined as a sponsor in Nokia's ongoing mobile multiplayer games
competition to support the global search for new game developer talent
and bring a new breed of innovative, connected mobile games to the
Chinese market.
As a result of Sina joining the competition, Nokia announced that the
deadline for accepting mobile game concepts based on the Scalable Network
Application Package (SNAP) Mobile platform has been extended to September
24. Selected concepts based on SNAP Mobile will receive free development
support and preparation for market deployment.
"Sina will provide the winners of the multiplayer competition with a fast
track opportunity to distribute games in China. This competition
encourages developers and publishers to raise the bar on mobile game
innovation, and developers located anywhere in the world, can compete,"
says Terry Tian, director of Sina's Network Business Department. "We are
keen to add more SNAP Mobile based games to our portfolio, and see this
competition as a unique way to speed deployment of innovative games to
market."
E-commerce investment
Alibaba.com Corp will invest 10 billion yuan in the next three to five
years to integrate sectors linked to e-commerce.
The big-picture plan is to come up with a complete industry chain, such
as facilitating small companies' overseas sales, according to Alibaba.com
senior executives.
The money will be invested not only to strengthen its own muscle, which
covers online auctions, business-to-business trader matching and online
payment, but also in external projects like logistics to improve the
e-commerce infrastructure and support the industry. Company officials
wouldn't say whether it means acquisitions to expand Alibaba's portfolio.
The company is already China's largest e-commerce firm.
"In the next few years we will be devoted to the industry's development
to build a favorable environment and 'an ecological chain' to go with
it," said Jack Ma, Alibaba's founder and chief executive officer, last
week.
Ma said the money will be used for reforms of the e-commerce industry
chain that government doesn't have the budget for.
Property cooperation
China's Ginwa Enterprise Co said last Monday that Citigroup Property
Investors Asia Ltd, Citigroup's property investment arm, plans to sign an
agreement to invest in real estate and related assets in major Chinese
cities owned by the Chinese firm.
According to Ginwa's filing to the Shanghai Stock Exchange, Citigroup
will soon sign an agreement with Ginwa to invest in its five-star Howard
Johnson Ginwa Plaza Hotel in Xi'an, Northwest China's Shaanxi Province.
Xi'an-based Ginwa may join with Citigroup to buy other projects. The two
parties are still in the letter-of-intention stage, which doesn't mean
any compliance force, the Chinese firm said.
The Chinese company has been losing money for three straight years and is
at the risk of being delisted.
In February, Citigroup raised $1.29 billion in its Asia opportunities
fund and plans to invest $600 million of the fund in China and $400
million in India.
Overseas investors are buying properties in China in expectation that the
country's economic boom will boost demand for office buildings and
residential properties. The Chinese government last year imposed
restrictions on foreign investment to curb overseas speculation and a
surge in domestic property prices.
Steel merger
The mainland's largest privately owned steelmaker Jiangsu Shagang Group
said last week that it's seeking a controlling stake in Anyang Yongxing
Iron & Steel Co Ltd.
Anyang Yongxing is the biggest privately owned steel producer in Central
China's Henan Province.
"We are talking with Anyang Yongxing on the acquisition because their
product structure is complementary to ours," says a Shagang executive
surnamed Qian.
If the deal goes through, it will be China's first cross-regional merger
of two privately owned steel manufacturers. The deal is expected to be
completed this year.
An Anyang County government official said last month that Henan Province
is actively promoting a merger between Shagang and Anyang Yongxing as
part of a plan to restructure the steel industry.
"We are also talking with other local and international steelmakers about
possible mergers and acquisitions," says Qian, who declined to elaborate.
Qian denied rumors about Baosteel's intention to acquire Shagang and
speculation that his company will invite strategic funds from US
investment bank Goldman Sachs. "I'm in charge of investment, and I
haven't heard anything about this," Qian says. Shagang began cooperating
with Anyang Yongxing in 2002.
(China Daily 09/24/2007 page6)
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ersonnel has become a pressing task for fund
management companies in China, according to a recent survey by
PricewaterhouseCoppers.
According to the survey of 19 fund management joint ventures, 50 percent
of respondents reported staff turnover rates of 15 percent to 30 percent
this year, much higher than the roughly 5 percent rate in European
countries.
Meanwhile, total staff headcount is expected to expand by 79 percent in
the next three years to 2010, according to the survey. In the fight for a
limited supply of qualified investment professionals, staff poaching is
becoming a real threat for many fund management companies.
"Many fund management companies perceive a major threat to competitor
hiring," says Alex Wong, partner of China Investment Management Industry
and Real Estate Funds Practice at PricewaterhouseCoopers.
"The high pressure on mutual funds managers and relatively lower salary
compared with the big salaries paid by private funds were the main
reasons for the high personnel turnover," says Lou Jing, an analyst at
Haitong Securities.
A total of 102 fund managers, or 30 percent of the total employed in the
industry, have left their positions since the beginning of the year. The
percentage is higher than an average of 28 percent in 2006, according to
statistics from TX Investment Consulting Co Ltd.
"Many fund management companies have paid much attention to recruiting
and retaining key personnel and introducing staff incentive schemes, as
the fund industry is expanding at a faster pace," Wong says.
Fullgoal Fund Management Co Ltd recently launched a new incentive scheme
as the centerpiece of its career development plan for employees. "It will
help them to be clear of their career opportunities, provide them with
new opportunities such as salary increases, training and job rotation for
those who miss a promotion," says Wang Zhiguang, a spokesman from
Fullgoal Fund.
"There are many incentive measures, including generous pension schemes,
fat bonuses and big salaries. A good corporate culture and a good career
platform can also help them promote themselves," says Li Jianguo,
vice-chairman of Fullgoal Fund.
Statistics from Wind show that the staffs of 29 fund management companies
had invested in a total of 115 mutual funds as of the end of June this
year, after the China Securities Regulatory Commission (CSRC) announced
on June 14 to allow fund management companies' staff to invest in
open-end funds.
Fortune SGAM Fund Management Co Ltd launched the first fund managers'
incentive scheme in August. The incentive scheme encourages fund managers
to buy the mutual funds they manage, and fund companies will buy a
matching amount. The return of funds bought by companies under this
arrangement will be used to award fund managers.
Li Zhengqiang, deputy director of the CSRC's fund department, said in a
CCTV interview in August that the CSRC would also consider the stock
options incentive scheme in fund management companies to establish a
long-term incentive and risks sharing mechanism.
The CSRC issued a draft notice in May this year specifying that employees
can directly buy up to a 20 percent share of their fund management
company, which can then be restructured from limited companies to share
holding companies.
"Stock options incentive is expected to link the interests of fund
managers, fund companies and investors closely," Lou says.
"The scheme can help companies maximize the stock value through a stock
exchange listing," says Li at Fullgoal Fund.
"The shares dividend alone can be very attractive," says Yu Shanhui, an
analyst at TX Investment Consulting Co Ltd.
But some other analysts say fund managers should not be entitled so many
priviledges because they did not take investment risks.
"The problem is whether the major shareholders are willing to sell their
stakes because it may shake their controlling status," says Lou. Lou
added that the government authorities should also strengthen its
supervision over fund trade while introducing new systems.
(China Daily 09/24/2007 page5)
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