Time is fleeting. Things are growing. All of a sudden, 2020 is coming.
"South", a homonym in Chinese for "difficult", became a buzz word for 2019. This is a creative humour from media, and also the exact description of how many of us feel about the past year. 2019 is a tough year, which is made even more evident by the Chinese national working plan focusing on steady growth for the next year. In the Central Economic Work Conference, negative words popped up frequently: More efforts are needed to deal simultaneously with the slowdown in economic growth, making difficult structural adjustments, and absorbing the effects of the previous economic stimulus policies; economic downward pressure is rising; the world economic growth keeps slowing down; Sources of uncertainty and risks across the globe has significantly increased. From the founding of China to a moderately prosperous society, China has been seeking growth while maintaining steady under huge pressure.
The pain of time is better told through an individual's feeling. As an active player of commodities market, we (Cedar) are not only sensitive to the changes of the economic situation, but also have empathy with the pains suffered by thousands of corporations on the upstream and downstream of the commodities industrial chain. In the past year, some companies we serve through our commodities supply chain suddenly went out business. One after another company ran out of cash and went bankrupt, among which there were those listed on the Fortune Global 500. Private enterprises, especially SMEs faced difficulties and high costs of financing. As bad news flooded in, bankruptcy seems to be normal while staying alive is not, which is a weird social phenomenon.
Many said 2019 was a life-or-death test for private enterprises, and those who survive belong to straight-A students. We not just made it, but kept a steady and robust growth, though at the lowest rate for the past 5 years.
The pains we have gone through are unprecedented, so are our gains. In view of the general pattern of the whole commodities industrial chain, we brought in a trust license for supply chain financial innovation as our focus. Doubts and controversies about this remain fresh in my memory: Is Cedar capable enough to take over? Would the trust become a burden to Cedar? Definitely not. A new year has arrived and we are not held back. Instead, we have adopted concrete measures to deliver our promises - To be responsible for the legacy problems until they are solved, hopefully ahead of 22 January, the deadline agreed before. In doing so, we are putting a new face on trust.
New ground we broke in trust is a microcosm of our business development in the past 12 months. With complicated external environment and violent fluctuations of the commodities market, we have managed to rein in risks, defend our stronghold and even achieve important breakthroughs one after another in mineral resources, global supply chain and advanced manufacturing, etc. We have taken trade cooperation with Germany to a further step and have brought in the world's most environmentally friendly PO technology; co-built the first domestic ADN production base in China,breaking out of the technology monopoly of foreign countries;attended "the Mining for the Common Good,"sponsored by the Dicastery as the first Chinese companies invited; established business presence in key cities of China, with south western headquarters settled down in Chengdu; will signed a important deal in Davos during the 2020 Annual Meeting of the World Economic Forum in 20 days to acquire a world influential steel trader. Through a whole year's efforts, we have managed to take a key step forward for the commodities industrial chain, laying a solid foundation for the upcoming strategic transformation.
Remarkable performance growth and business breakthrough were achieved against the grim economic situation. So many starts were made during a short period of time. These are the reasons why Cedar Holdings stood out of the crowd in 2019. I believe that even observers who were once doubtful about Cedar would show us the most respect and kindness for what we have done. Two large state-owned banks, the bellwether of the prospects of private enterprises, granted a large line of credit to Cedar respectively, which also shows the mainstream financial institution's positive outlook on Cedar.
As we overcame difficulty and spread our business presence in 2019, we have made our way forward, especially the section in 2020, much easier with more confidence.
In the past 5 years, we have been expanding rapidly to obtain plenty of space for our business development. As a result, we have successfully established our business landscape before the dramatic changes of the external environment. Our next step will be intensive growth of the core business through steady operation, aiming for a larger leap.
2020 is a key to strategy transformation of Cedar. We have further streamlined our business structure, with a focus on building a world-leading commodities service provider for the industrial development. Specifically, we have reinforced our business foundation and capacity in commodities offerings and supply chain service. As we strive for a business coverage and operation of the whole commodities industrial chain, we are getting even closer to our goal of becoming the Chinese equivalent of Glencore, the one and only Cedar of China and finally the Cedar of the world.
Being listed on the Fortune Global 500 means we have become a large enterprise above designated size. We will grow from being a large, to a strong and then to a great company. In doing so, we will be able to lead the reform of the industry we operate in, creating more values for our country and society. It is also our goal that Cedar provides over 10,000 companies around the globe with better industrial chain service, fighting for a bigger say for China in the global commodities market. This is our mission in this era and the responsibility that we, as a leader of Chinese commodities sector, should undertake.
Why are we confident about our future? Because we boast a business foundation solid as a rock. In the past two decades, we have established a commodities supply chain service network spanning Asia, Europe and Africa; kept a zero-default record; focused on advanced manufacturing of sub-categories of commodities, becoming a hidden champion of fine chemicals area;achieved breakthroughs of core technologies, breaking a foreign "stranglehold" in China; explored new possibilities in 5G industrial chain and advanced equipment manufacturing. We will continue to improve our supply chain service network and acquire mineral resources globally in order to cover the whole commodities supply chain in our business.
Because we are faced with historical opportunities presented by China's national strategy. Juding from the Report of 19th National Congress of the CPC, the Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area to the 28 New Regulations of Encouraging Private Enterprises Growth, the importance of supply chain industry as part of national strategies has been widely accepted. With current global pattern, China will have to deal with even higher requirements upon worldwide raw materials sourcing, productivity distribution and products marketing. That's why it is necessary to put in place global distribution of commodities resources as well as establish global supply chain system. It is fair to say that the globalization drive of Chinese commodities businesses has reached a tipping point when a variety of corporations need to further integrate into the global trade system for cooperation and competition of the global market, raising their voice in the world commodities market. Among them, Cedar has taken the initiative and came a long way.
As part of our globalization efforts, we will launch reforms in three dimensions: management, specialization and culture.
First, management reform. As the company grows larger with increasingly complicated businesses units and competitive market competition, our management mechanism and decision-making process should be more meticulous, reasonable and specialized. We have established rotating leadership system and collective decision-making mechanism for business operation. At the same time, we have opened our door to more skilled talents and opened up more opportunities for promotion. Thourough organization reform and optimiation of mechanisms, we aim to give full play to capabilites of different talents and pool their wisdom, lifting our management to a new height.
Second, specialization reform. We used to prioritize size. As our business presence has been established in a variety of industries, we will switch our focus to specialization. If we don't pursue excellence in specialization, it is hard for us to stand out of the crowd in the globalization competition. Specialization means being more focused. We will firmly focus on commodities as our core businesses with a concentration of superior resources and energy, continuously improve specialization, creating the maximum value out of what we have now.
Third, culture reform. Belief of the Cedar staff determines the future of Cedar. Making it to Fortune Global 500 is our first step towards globalization. Just as the saying goes:"A drama begins with a prologue, but the prologue is not the climax". we shall not be arrogant for the achievement that has been made, or allow "Big Company Diseases" to develop just because we have scale up. This could not be truer especially considering the cutthroat global competition and hardship of strategic transformation. Only by sharing the belief in Cedar culture among Cedar staff could we stay alert for potential danger and keep working with an entrepreneurial spirit until we accomplish our mission.
As we bid farewell to 2019, we would like send our gratitude to all the Cedar staff who fought along with us for the past 20 years since 2000. Cedar owes its rapid growth to every one of you. Time, which is home to the power of creatures, is unstoppable. As time moves forwards, changes keep happening day by day.
Would we see better world in 2020? You and I know what the answer is. In the midst of once-in-a hundred-years change, some people feel confused and doubtful about their way ahead. It is actually nothing compared to vicissitudes of history. We keep a cautious attitude for the past 23 years, being well aware that we have to survive difficulties in order to thrive. If this is a time that causes you anxiety and sense of danger, you should be glad to be a part of it. It can drive you forward and present many opportunities as well as returns.
2020 is coming, so is a whole new world. We can't help but trotting down the way towards it. Staying steady should be the tone of this year.Neither would we bite off more than we can chew nor balk at potential difficulties.We shall solve any problem through development, catch opportunities while staying focused on our core business, and improve our management,specialization and internal cohesion in order to shatter ceilings in the reality. Our future could hardly be plain-sailing. The strong walks on a track of his own or even beat a track through thorns and thickets when there isn't one at all.
Directions determines the way we go, and therefore we need to stay in one strategic direction. When we target our power at one direction, unaffected by changes, unfrightened of making moves, unwavered at criticial point, we stand a great chance of creating unlimited value out of limited resource.
Way determines destiny, and therefore we should stay confident. If every one of us in Cedar stay optimistic and fearless, the development of our company will stay on the planned direction.
As the new year sunlight kisses the earth, many of us braced the cold to accumulate the power of warmth. In this ever-changing era, we believe that there is something good worth waiting for, and there are dreams worth running for. In the end, I would like to give my best wishes to 2020, to Cedar Holdings and to China!
By King Cheung, Chairman of the Board of Cedar Holdings
