China’s State Council has approved a merger between China National Machinery Industry Corporation (Sinomach) and textile giant China Hi-Tech Group Corporation, an official statement announced Thursday [29 June 2017]. The textile conglomerate has become a wholly-owned subsidiary of Sinomach, an equipment manufacturing group, and will no longer be directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC), according to the statement released on SASAC’s website…Full Article: ECNS.cn June 2017

Key Points

  • As a result of the merger, China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) now has 101 state-owned conglomerates under its management.
  • The Shenzhen-listed Jingwei Textile Machinery Company (SHE:000666) is a subsidiary of China Hi-Tech Group.

ChinaAg Comments

  • In November 2016, China Grain Reserves Corporation (Sinograin) and China National Cotton Reserves Corporation merged (both state-owned companies), with Sinograin subsuming China National Cotton Reserves (subsidiary).
  • In July 2016, COFCO and Chinatex merged (both state-owned companies), with COFCO subsuming Chinatex within its corporate structure. As a result of the merger (Chinatex will be a subsidiary of COFCO), COFCO Group will have an 18% market share of China’s edible oil processing sector, and a 10% of the world’s cotton crop market. During the same month, according to a research fellow with the Guangdong Academy of Social Sciences, China’s SASAC hopes to reduce the number of 110 state-owned conglomerates under its management to less than 100.
  • In June 2016, COFCO announced it would reduce the number of legal entities under its control by 20%. In total, COFCO noted 65 subsidiaries will need “improvement”, 95 subsidiaries will need better management, and 102 subsidiaries will be to be restructured via mergers and acquisitions. For example, acquired in November 2014, China Huafu Trade & Development Group added 70 subsidiaries to COFCO’s payroll.
  • In March 2016, a letter of protest against ChemChina’s acquisition of Syngenta was delivered to the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) (ChemChina was a member of the SASAC).
  • As of September 2015, China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) had 110 state-owned conglomerates under its management.
  • In November 2014, COFCO acquired the state-owned company Huafu Group, a company that managed non-staple food reserves in addition to processing and distribution of food products. After the acquisition, the number of companies owned by China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) dropped to 112.
  • In September 2014, farming equipment manufacturers China National Machinery Industry Corporation (SINOMACH) and YTO Group announced plans to invest and expand into Southeast Asia (i.e. Thailand and Vietnam).
  • In July 2013, China CAMC Engineering (subsidiary of China National Machinery Industry Corporation, aka SINOMACH) signed a MoU with Ukraine’s Ukrlendfarming to construct a cattle breeding (~7,000 heads) facility in Poltava Oblast, central Ukraine. Construction would reportedly take place from 2014 to 2017.

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