This is a key time for testing the general strength of an enterprise, in the face of environmental concerns and an economic depression and recession and Petrochemical has benefited a lot from its low-debt operations. In 2012, its costs on loans are expected to be cut by more than 4 million yuan.
ChemChina has always asked that its branches learn to cut their liability, so, by late 2010, Harbin Petrochemical had taken the opportunity provided by a market recovery to pay off all its loans ahead of schedule, thanks to an abundance of capital. So, by 2011 and 2012, it was able to join the struggle without any burden and save nearly 10 million yuan on interest over the two-year period.
The market is shaky and full of change. It is only with good management that you can expect to make a profit even in the most favorable circumstances and even more so under unfavorable conditions. This is a tried-and-true concept of Harbin Petrochemical, which has worked to prove itself in the past three years, especially in 2012, when the economic situation in China got worse and prices fell sharply, and enterprise benefits shrank dramatically. It is important that every enterprise learn how to save every penny.
Without a debt burden, the company can focus on the budget. During the regular production period, there is a detailed monthly funding program and approval procedures are quite strict, with the call to keep costs under strict control. Before the overhaul, any work suspension and overhaul idea had to be worked out in advance, compared with previous ideas, with the aim of saving as much as possible and cutting costs. As the price of goods continued to fall, the Sales Department came up with a forecast to keep product prices stable, under a “zero-accounts-receivable” principle. At the same time, some measures to guarantee low stock for finished products and raw materials were applied to keep the cash flow and reduce operation risks for our enterprises.