Sail across the sea

Chapter 513 Spiral Ascent

"The biochemical company's next flagship product is amino acids, and its goal is to capture more than 10% of the global amino acid market by the end of this century."

Gao Fan held up one finger to indicate that this was the first aspect he wanted to discuss.

"Preparations for this have already been made," Fu Yiming said. "Two years ago, we signed a research agreement with the Institute of Microbiology of the Chinese Academy of Sciences, asking them to help us develop production processes for glutamic acid and lysine. Now the entire process route has been finalized, and as long as you give the order, we can start construction immediately and put it into production within a year."

Gao Fan nodded; he was naturally aware of this matter. When the Institute of Microbiology was developing the amino acid production process, Gao Fan had also discussed it with their technicians, sharing some of their future technological ideas under the guise of discussion. The production process currently being developed with their assistance is at least 10 years ahead of current international standards. Like Vitamin C, it has a cost advantage.

"The second is the chemical cleaning company. They need to divest the production of surfactants, leaving only the daily chemical products, and focus on the household cleaning agent market," Gao Fan continued.

Gu Kunquan said, "I've wanted to address this issue for a while now. Our camellia dishwashing liquid is very popular in the domestic market, but consumers have expressed concerns because our company is called a chemical cleaning company, which makes them feel somewhat unsafe."

"As everyone knows, the general public is still somewhat resistant to chemicals, always thinking that anything related to chemicals is toxic. So, shouldn't chemical cleaning companies change their names?"

Gao Fan laughed and said, "It's true what they say, things change over time. When we first started doing chemical cleaning, everyone thought that anything with the word 'chemical' meant science. The fact that our chemical cleaning business was able to spread throughout the province was largely due to the influence of the word 'chemical'."

“Times have changed,” Fu Yiming commented. “In the past, people knew little about science and thought it was mysterious, so when they heard it was chemical cleaning, they thought it was some kind of high-tech stuff. Now that people’s scientific literacy has improved, they won’t think that way anymore.”

"But I feel like the word 'chemistry' is poisonous. Senior Brother Fu thinks this is a sign of improved scientific literacy?" Gao Fan retorted.

Fu Yiming laughed and said, "You're making things difficult for people. Philosophically speaking, human understanding progresses in a spiral. Going from worshipping chemistry to fearing chemistry is going from one extreme to another. Once everyone's level of understanding improves further, they will be able to correctly understand the role of chemistry."

“Before that, let’s change the name,” Gu Kunquan suggested. “I’ve seen other dishwashing liquid companies that are called ‘Daily Chemical Company,’ so let’s use that name too. Let’s call it Canghai Daily Chemical Company.”

"Doesn't it still have the words 'chemical' in it?" Gao Fan said.

“It’s different,” Gu Kunquan argued, but for a moment he couldn’t quite put his finger on what the difference was.

It's just a feeling; chemical cleaning seems so violent, while everyday chemical products exude a certain warmth. This is a phenomenon that a language teacher simply cannot explain.

This wasn't a problem that the three executives needed to rack their brains over. After a brief discussion, they decided on the company name, which was the name recommended by Gu Kunquan for a daily chemical company.

"Let's set up a separate company for oilfield surfactants, and call it the Petrochemical Company," Gao Fan continued to arrange.

Gu Kunquan shook his head again and said, "This name is definitely wrong. When people talk about petrochemicals, they mean things like oil refining, ethylene, and chemical fibers. We produce chemical products used for oil extraction, so it should be called..." "Oilfield chemicals, that won't be ambiguous," Fu Yiming said.

“Yes, yes, let’s call it Oilfield Chemical Company,” Gu Kunquan agreed.

"Alright then, let's call it Oilfield Chemical Company." Gao Fan readily agreed. He really wasn't good at naming things, unlike these two guys who had worked their way up in the system and were experts at this kind of superficial stuff.

"The products of oilfield chemical companies cover a very wide range. They include general oilfield chemicals, drilling chemicals, oil and gas development chemicals, enhanced oil recovery chemicals, oil and gas gathering and transportation chemicals, and water treatment chemicals, which represent a market size of tens of billions of yuan every year."

"Several hundred billion RMB?" Fu Yiming asked.

“It’s in US dollars,” Gao Fan said. “My college roommate now works at the China Petrochemical Corporation. He said that the domestic oil fields alone use tens of billions of RMB worth of chemicals every year. This is because our domestic oil fields are too frugal and do not use chemicals in many situations where they could be used.”

“The scale of oil field development abroad is more than ten times larger than ours, and they are heavily dependent on oilfield chemicals, so the global market size is at least $300 billion.”

"Another rich mine!" Gu Kunquan drooled.

In a market worth $3 billion, even if Canghai Chemical only gets 1%, that's still $300 million. How many bottles of dish soap would they have to sell to make that much?
Oil companies are all deep-pocketed and wealthy. As long as the product is good, they don't even have the interest to haggle. Moreover, their business is very stable, and they can make a living from one product for ten years.

"In recent years, the Beijing Research Institute has conducted a lot of research and development on oilfield chemicals and has accumulated more than a dozen products. For example, carboxymethyl starch is used to reduce water loss and filtration loss in drilling mud; polyacrylamide is used to improve the rheological properties of drilling fluid and reduce friction; and acrylate-maleic anhydride-octadecylamine terpolymer is used to lower the pour point of petroleum and facilitate transportation."

"The production processes for these products are not complicated. The main equipment consists of reaction vessels, polymerization vessels, filters, etc., which are not much different from the equipment we used to use to produce surfactants."

“There aren’t many companies in China that produce oilfield chemicals right now, and many products are not available domestically, so we have to rely on imports. If we can develop them, just the import substitution alone will be enough to recoup our initial investment,” Gao Fan said.

"The chemical market is indeed full of treasures," Fu Yiming exclaimed. "I've heard my colleagues in the technical department talk about these things before, but they talked about them more from a technical perspective. I'm a history major, so I really don't understand these terms."

"Now that General Manager Gao has explained it this way, I have a general idea in mind. I think we should follow General Manager Gao's approach, first replace imports, and strive to get all domestic oilfields using oilfield chemicals produced by ourselves."

"Then we'll consider entering the international market and making money from foreigners."

Gu Kunquan smiled and corrected him, "Old Fu, you're being too conservative. I feel that Gao Fan's strategy is to take over the domestic market while developing the overseas market. If the overseas market expands smoothly, according to our CEO Gao's usual practice, he'll have to lower the price for domestic users. This is called 'using external factors to support internal ones'."

(End of this chapter)