Sinochem Urn Fuji To The Synergistic Effect Study

This article takes Sinochem and Wengfu Base for example, investigates the synergy effect of Sinochem and Wengfu Base from theory and practice, and arrives at a conclusion that synergy advantage exits in the two companies.China is the biggest country of chemical fertilizer production, import and consumption in the world and is also the competitive focus of many big international fertilizer suppliers. With the opening steps of fertilizer market after joining in WTO of China, some foreign enterprises are strengthening the control of Chinese fertilizer resources. According to this backgroud, Sinochem analyzes the condition of Wengfu Base and intends to acquire it.As the biggest phosphate fertilizer production enterprise in China, Wengfu Base have advantages in resources, market, cost and so on, It has great developing potential and investment value. But as an enterprise constructed in the planning economic system, its management system, administrative opinion, history debt, sales have intrincit defects obstructing its development. With experiences in fertilizer production and international management for decades, Sinochem, a comprehensive commercial and trade group, has great advantages in economic strength, management, and sales network. Still it has some limitations such as lack of extension to upstream and downstream of trade and dependence on government policies.Through the analysis of advantages and disadvantages of both companies, the author finds out the powerful strategy relativity in market, production, purchase, basic facilities and synergy advantages in market, price chain, investment, operation.This paper evaluates the synergy effect by four kinds of scheme including market, resources, clientele and technology. It brings up with two ways to enact the synergy effect, strategy alliance and acquirement. After analysis of recombination of resources, process, and value of the two companies, it advances the eltimate goal is to build up a big fertilizer enterprise group in China. It also proposes some policy supports from the government.