Distinguished Guests, Dear Colleagues, Ladies and Gentlemen,
Good morning. First of all, my congratulations on the opening of Carbon Black China 2008. Under the joint efforts from colleagues at home and abroad and China Carbon Black Research Institute, this conference has grown to be an important annual event for information and academic exchange within this industry. The convening of Carbon Black China 2008 will effectively promote technological progress and scientific development of the carbon black industry in China, expedite exchange, communication and trade expansion between domestic and international market players, and envisage a brand new stage for the scientific development of China's rubber and carbon black industries.
The 11th five-year plan offers the best occasion for the scientific development of China's rubber industry, whose entry into maturity from 2007 onward is indicated by indigenous innovation, emergence of well-known brands and fast growth of corporations, enterprises and groups of scale. In 2007, thanks to indigenous innovation, improved product quality and brand development, domestic rubber industry realized substantial production volume and revenue, with the latter scoring more achievements. There were 46 major member enterprises of rubber industry in 2007, whose production of radial tires made up 76% of the total, approaching the average level of developed countries. The same index was 70% industry-wide, meeting the expected goal in the industrial blueprint of the 11th five-year plan. A case in point is the 2nd flagship industrial product of China's rubber industry, conveyor belt, boasting over 80% of high-strength conveyor belt in total product mix. The same scenario can also be found in other products.
Chinese carbon black industry grew by leaps and bounds in the past few years. The first sign is the availability of new products to basically meet the demand of rubber components in manufacturing tires. The second is the great headway in conserving energy and raw materials as well as reducing consumption. 2007 witnessed both a 5 to 6% drop of sulfur in carbon black and clean, scientific and socially accountable production in factories. Another indicator is the shift away from small plants in the past to mainstream of large-scale enterprises. A couple of former key enterprises under the Ministry of Chemical Industry two decades ago, like Tianjin Dolphin Carbon Black Co. Ltd. and Suzhou Baohua Carbon Black Co. Ltd., have experienced positive growth these years. A more inspiring phenomenon is the appearance of new market players with an annual production above 100 thousand tons, typically Jiangxi Black Cat Carbon Black Co. Ltd. and Hebei Longxing Chemical Stock Co. Ltd. Besides these two categories, a third is joint ventures by multinational corporations in China. Hence the new image of carbon black industry centering on large-sized corporations, groups and plants, which is more conducive to structural adjustment of products, bigger revenue generation and penetration into world market.
Technological advance in carbon black industry during the past few years is also tremendous. Contribution made by Carbon Black and Rubber Research Institute, China Carbon Black Research Institute and Carbon Black Research & Design Institute of China Rubber Group in indigenous innovation can never be underestimated. It's an integration of research, design and production in its own right and relates closely to industry. Therefore, in this year's term-end election of Carbon Black Subcouncil, China Rubber Industry Association, our head, Mr. Fan Ruxin, was elected as new director. It will lead to better integration of research and production as well as more effective indigenous innovation and general technological advance in carbon black industry.
2008 receives a lot of attention for the multitude of economic challenges for China. The first that catches people's eyeballs is national adjustment on relevant economic policies. Second is the rising figure of international trade disputes and ever-intensifying international trade protectionism. The future for China's rubber industry against this backdrop concerns us, downstream and upstream users and even international peers. Based on figures of production in January and February and our pre-2008 prediction, we postulate a higher growth rate in rubber industry at large than national economy or GDP. Growth rate of tires will be around 15%. Being our main growth opportunity, radial tires will continue to march forward, achieving an estimated 75% of national average in the ratio among total tire production and an 80% for 46 key enterprises, as the initial calculation goes.
Carbon black industry surely has to develop along with the rising demand of tire and other rubber products. All members of this industry are eagerly expecting carbon black industry, in the first place, to step up efforts in reshuffling product structure through indigenous innovation, with extra focus on new types of specialized carbon for new products like radial tires. Second, national planning requires us to emphasize energy conservation and emission reduction. We hope to better communicate with local governments and relevant departments in central government and inform them that carbon black industry is indeed one that makes full use of natural resources and energy, reduces energy consumption and emission, and is environment-friendly. Therefore, we have submitted several reports to the State Council this year, stating that our industry does not consume much energy, produce much pollution, nor is resource-intensive. We'd like to see enterprises deliver this statement to local governments to win more effective support for large-sized enterprises. Third, we hope carbon black industry can further develop its own brands of great reputation. Under market-oriented economy, the absence of brand, or famous brand, and trademark necessarily equals a loss of market share and benefits.
On a final note, we sincerely hope that big groups and corporations in China's carbon black industry can quicken their steps of development, which is beneficial for China, for society and for harmony between mankind and environment. Enterprises with a yearly production capacity of over 100, 60 and 30 thousand tons should position themselves properly in the marketplace vis-à-vis their practical situations. For smaller plants adopting backward technologies, dry palletizing method in particular, the only way out is reform or elimination from the market. These measures ensure that our rubber industry uses only good materials and boasts a sound social reputation, especially for carbon black sector. They also spread the message that it does not consume a lot of energy and resources, produce much pollution, nor pollute the environment. Last but not least, I wish this conference every success and all of you a happy stay during these three days in Guilin. Thank you.
(Full text of the remarks by Ju Hongzhen, President of China Rubber Industry Association at Carbon Black China 2008 on April 8, 2008, as transcribed)