Chinese national firms Sinochem Corp. and ChemChina are merging to create a massive chemicals conglomerate with interests in plastics materials and machinery.
Officials announced the merger at a Sept. 2 news conference. The announcement was made by Frank Ning, who has been chairman of both companies since 2018.
The combined firm will employ more than 200,000 and have annual sales of more than $150 billion.
China National Chemical Corp., commonly known as ChemChina, is the majority owner of global plastics machinery supplier KraussMaffei Group GmbH. ChemChina also makes rubber processing equipment and industrial dryers.
Plastics-related products made by ChemChina include commodity and engineering resins and polyurethanes, as well as natural rubber. Sinochem's plastics-related products include antioxidants, pigments and natural rubber.
Sinochem also has holdings in oil, real estate and finance. The firm ranked No. 109 on the 2020 Global Fortune 500. Both Sinochem and ChemChina are based in Beijing.
In a news release, officials said that ChemChina and Sinochem "are both promoting their transformation to a technology-driven innovative enterprise."
"In the face of today's international and domestic situation, changes in market demand and improvements in product technology, corporate transformation is not a question of whether to do it or not, but a question of survival," they said. "Many Chinese companies are now facing similar situations."
Ning added in the release that China has independent production of less than half of the roughly 100,000 fine chemicals made globally. "This issue is becoming a challenge," he said.
Officials added that sales of original and high-tech products make up less than 30 percent in ChemChina and Sinochem and that this proportion "needs to be gradually increased."
"The plane of China has already taken off and it cannot be stopped," Ning said. "It will definitely fly farther and higher."
He added that since China entered the World Trade Organization in 2001, officials have believed that Chinese companies and global companies should develop together. "I believe and hope that the process of globalization will not be blocked," Ning added.
"It is the time to test entrepreneurship. We should have innovation, responsibility, courage and persistence, as well as international vision."