One of China’s leading chemical producing companies has expressed the intentions of adopting the blockchain technology. As per the company, they have recently started a new Blockchain Warehouse Receipt portal. The purpose of launching the platform is to tackle the problems that keep rising in the operations and trades of chemicals.
The company confirmed that at present, the most problematic issues they are facing are related to trade financing and operation costs. The company explained that the main reason behind the surge in the costs of these products is mainly due to the COVID-19. After the world was attacked by Coronavirus, countries from all across the world have become more active.
The countries are now taking extra precautions and due to this, the demand for safety and environmental measures has gone sky-high. The same has been the case with China because the petrochemical trade costs have shot through the charts in the past months.
Even before the situation became worse, small-time chemical companies were already having a hard time paying of their loans and the credits. These companies were already doing their trades on risky conditions as they neither had an effective risk control nor had a secure tracking process.
As a result of the discrepancies caused by a lack of control over these protocols, the financial lending firms have now become strict and have tightened their lending conditions.
This is the reason why the major chemical companies have now started adopting the blockchain technology. These companies are now integrating blockchain technology into their logistics and trading sectors to cover the weak points. As per the company, adopting the blockchain technology will definitely help them keep a track of the expenditures and boost their turnovers.
The company completed its blockchain phase towards the mid of September 2020. Later on, the company made its financing transaction on a digital warehouse receipt pledge on September 27th.
The entities involved in the execution of the transaction were Nanchu Management Group, China Construction Bank (CCB) Inner Mongolia, and Sinochem Energy High-Tech, which is the state-owned petrochemical giant.