Qenos Formation and Ownership by China National Chemical Company - A Case Study
Qenos is Australia's sole manufacturer and leading supplier of polyethylene (PE), producing high density, low density and linear low density PE grades.Qenos supplies approximately 63 per cent of the domestic market and has an annual turnover of $A700 - $800 million. With manufacturing facilities at Botany (New South Wales) and Altona (Victoria), Qenos directly employs over 800 people.
Qenos was formed during 1992 to 1997 with the amalgamation of companies such as Hoechst, Commercial Polymers, APC and ASR into Kemcor. This amalgamation occurred as industry tariffs reduced from 30 to 3 per cent and competition increased, including through the rapid expansion of capacity in Asia.
In 1999, Kemcor and Orica combined to give the business "critical mass", with the intent of on-selling it. Neither partner considered the business "strategic" or core to their Australian assets. On 16 February 2006, China National Chemical Corporation (Chem China) acquired 100 per cent of Qenos. ChemChina is a state owned enterprise that employs more than 100,000 people and has assets close to $A15 billion. ChemChina is growing rapidly within China and internationally.
Ross McCann, Managing Director of Qenos, will highlight a series of difficult issues leading up to the sale of Qenos - from industrial disputes, facility hazards, financing and natural incidents - that needed to be resolved. Programs were established to build confidence in all aspects of Qenos performance. Targets and standards were set and met in areas such as safety, output, market share and product development. A $100 million investment to change feedstock to ethane and LPG on the company's SCAL1 unit at Altona, improved the financial performance and business base of Qenos, leading to its sale. ChemChina has a long-term outlook for Qenos - it wants to keep and grow the business. This is an exciting change that provides many opportunities for individual growth within Qenos.