Ma Zhi Qing, founder of Shandong Qingyuan explains how he transformed a tractor business into an international oil refinery

Were it not for China’s economic reforms, Ma Zhi Qing would still be running his farm in Linzi, but thanks to a light bulb moment on a tractor in the 1980s, he leads a multi-billion dollar petrochemical corporate. He talks to Trade Finance TV about his remarkable journey from farm to industrial giant, with Deutsche Bank’s Frank Wu providing Mandarin interpretation and the financing perspective.

Today the group is the largest privately owned producer of base oil in China with a processing capacity of 8.6 million tonnes per annum (mtpa) and a production capacity of 1.9mtpa of API-I, API-II and API-III base oil types, accounting for around 35% of China’s overall capacity of high quality API-II and API-III base oils.

Certified with the ISO 9001 quality label it is one of 27 API certified companies in China. In addition, Qingyuan has moved further up the value chain with its own sales of finished lubricating oil, transformer oil, other specialist oil products and aviation kerosene. In 2016, the group became the only domestic producer of white oil with a production capacity of 0.1mtpa, the highest quality base oil that is widely used in pharmaceutical and medicinal applications, cosmetics and food industries.  

To take advantage of the crude import licence quotas, Shandong Qingyuan needed settle crude purchases in US dollars. In addition, rising oil prices and increased working capital requirements meant that facilities from only Chinese banks were no longer enough. The refining business relies on availability of funding and it is a capital-intensive business. Ma and Wu explain how prepayment finance with Western banks such as Deutsche Bank has helped the company build its export revenue streams.

Note that the questions asked by the presenters have Mandarin subtitles and that Wu translates the questions for Ma into Mandarin and Ma’s responses from Mandarin to English.

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