China Gas Holdings Ltd.

Client Overview

China Gas Holdings Limited (abbreviated as China Gas) is one of China’s largest cross-regional integrated energy supply and service enterprises. It is listed on the Main Board of the Hong Kong Stock Exchange under stock code 00384.

Through years of development, China Gas has established a diversified business model centered on pipeline natural gas, while integrating liquefied petroleum gas (LPG), liquefied natural gas (LNG), vehicle and vessel gas, heating solutions, new energy, electricity distribution and charging stations, gas equipment and kitchen appliance manufacturing, and e-commerce. The company primarily operates in mainland China, investing in, operating, and managing urban gas pipeline infrastructure, delivering natural gas to residential and industrial users, constructing and operating refueling and gas filling stations, and developing and applying petroleum and natural gas-related technologies.

Project BackgroundBy 2040, China’s natural gas market is expected to continue growing, but traditional urban gas business will enter a low-margin era. Factors such as improved natural gas availability, environmental pollution control, and the integration of natural gas with renewable energy will drive sustained demand for natural gas in the medium term.

China Gas has identified three strategic goals for its future development, positioning value-added services, LPG business, and emerging hotspot businesses as new growth breakthroughs. However, challenges such as limited integration of new businesses and ambitious yet pressing strategic targets have led the company to initiate a comprehensive transformation starting with procurement.

Project Process

Identifying Key Procurement Issues: Transitioned from a departmental perspective to a business-oriented perspective in institutional design.

Streamlining End-to-End Procurement Processes:

Established new processes such as category strategy management, cost baseline management, risk management, and procurement quality handover.

Enhanced the procurement system to better meet internal needs.

Supplier Management Optimization:

Shifted from decentralized to centralized supplier management, including for engineering, services, administrative, and material categories.

Introduced category procurement strategy methodologies and established procurement strategy templates.

Organizational Optimization:

Formed a Procurement Committee responsible for developing and supervising group-wide procurement strategies.

Established functional modules under the Procurement Management Department for certification, quality and technical standards, and procurement support, with a focus on high-value areas such as category management, supplier management, and procurement quality.

Internal Control Mechanisms:

Developed a cyclical internal control system for procurement to enable self-assessment, self-inspection, and continuous optimization.

Implementation Outcomes

Centralized Management:

Transitioned from decentralized to centralized procurement, with supplier certification for administrative, engineering, service, and material categories centralized under the Procurement Management Department.

Efficiency Improvements:

Reduced 231 approval nodes in procurement processes, achieving optimal total procurement costs.

Competitive Supplier Pool:

Built a competitive supplier resource pool to reduce procurement costs and control quality risks.

Professional Development:

Enhanced procurement organization professionalism, developed industry experts, and secured a comparative advantage over competitors.

Risk Mitigation:

Proactively identified and resolved risks systematically, reducing potential losses from procurement risks and avoiding long-term risks.