A groundbreaking ceremony was held late last week for GS Caltex's first Chinese gas station in Qingdao.
GS Caltex, Korea's second largest oil refiner, has set up a subsidiary over which it has total control. It is the first time a Korean company of this scale has established such a fully-controlled subsidiary in China.
GS Caltex will add at least two more gas stations this year.
GS Caltex had been working since 2003 to advance into the Chinese market and will invest US$5 million for its subsidiary and service stations in China.
"We decided to go independently in China, setting up a joint venture with a Chinese company," a GS Caltex release said. "That's because China is no longer a foreign market."
The subsidiary will play the role of an outpost taking charge of the sale of petrochemical products and the management of gas stations throughout China.
The first gas station will also provide repair and washing services.
At the groundbreaking ceremony, GS Caltex chairman and CEO Hur Dong-soo said, "This is just the beginning of our business in China. We will meet social, ethical and environmental requirements to become the most trusted company here."
Other participants in the event include Zhou Jia-bin, director-general of the Department of Foreign Trade and Economic Cooperation of Shandong Province, and Yu Chong, vice mayor of Qingdao.
Meanwhile, SK Corp., the Korea's largest oil refiner, has plans to build 30 service stations in the Liaoning Province this year.