Salt maker to step up reform pace

CNSIC charts plan to bring in more investors, list unit in stock markets

China National Salt Industry Group, or CNSIC, the country's biggest table salt manufacturer by production volume, will accelerate the pace of mixed-ownership reform by introducing new strategic investors and pushing one of its units to be listed in the stock markets in 2020, according to its top executive.

The centrally-administrated State-owned enterprise, which previously managed the sales and production of China's edible salt products, signed deals with 13 companies including Guangdong Salt Industry Group Co and China Reform Holdings Corp in September, to raise more than 3 billion yuan ($425 million) to support the listing of China National Salt Industry Holdings Co, one of its units, in the stock market next year.

Under the deal, 2 billion yuan of capital will be invested in China National Salt Industry Holdings Co to add new shareholders. The rest will be used in the group itself for further optimizing its resources, and to assist its subsidiaries to make positive transformation to lay a solid micro-foundation for the reform.

All these efforts are aimed to instill new vitality to boost the group's earning ability and further cut previous administrative and monopoly roles to better adapt to the new changes and new market environment brought by China's reform in the salt industry, said Li Yaoqiang, chairman of the Beijing-headquartered group.

Li said by partnering with other SOEs such as Sinopec Group and China National Petroleum Corp, the company will also diversify its business lines from producing table and industrial salt to developing salt-cavern gas storage facilities to improving its earnings ability in the energy field.

On Sept 9, Xi Jinping, general secretary of the Central Committee of the Communist Party of China (CPC), presided over the 10th meeting of the central committee for deepening overall reform.

During the meeting, Xi, also the Chinese president, chairman of the Central Military Commission and head of the central committee for deepening overall reform, said efforts should be made to strengthen synergy, coordination and efficiency in advancing reform.

"We will actively develop high-end salt products such as salt for medical use, daily necessities and snow-melt business, as well as specially-made salt for children, pregnant women and patients to enlarge our business scale," said Li.

In addition to upgrading its product value, he stressed that the group will continue to adopt traditional salt production methods in its factories, and actively participate in the ownership reform of salt farms in the Inner Mongolia autonomous region and Qinghai province to secure quality salt sources.

Eager to promote market-oriented reform in its titan SOE systems, China revised a regulation on common salt in an effort to reform the salt industry in January this year. It gave provincial supervisory departments the rights to designate salt manufacturers and wholesalers, and agreed that salt prices should be set by operators themselves.

Through the reform, the government abolished the mandatory management of the manufacturing, wholesaling, distribution and transportation of salt, and the procedure for salt operators to seek permits for salt transportation, which were parts of CNSIC's business in the past, said Zhou Lisha, a researcher at the research institute of the State-owned Assets Supervision and Administration Commission.

Supported by 43 business units and more than 30,000 employees, CNSIC's annual output of all kinds of salt products reached 18 million metric tons in 2017, accounting for 20 percent of the total national output. Meanwhile, the annual edible salt output amounted to 3.05 million tons, about 30 percent of the country's total, data from the company show.