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McDonald's, Sinopec Serve Up Drive-Thru Deal
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McDonald's China and China Petroleum and Chemical Corporation (Sinopec) have joined forces to set up McDonald's Drive-Thru restaurants at selected Sinopec service stations across China.

The move aims to accelerate the business development of McDonald's in China and strengthen the sales and service of Sinopec's non-oil products.

The contract was signed between the two Fortune 500 companies and Oriental Creation Management Co Ltd, Sinopec's only strategic and long-term partner responsible for the operation and management of its non-petrol business in China.

Drive-Thru is the name given to the McDonald's service that gives drivers access to the chain's restaurants from the convenience of their cars.

According to Mike Roberts, president and chief operating officer of McDonald's Global, the partners share goals of developing existing and new outlets in medium and large-sized cities in China. He said burgeoning car ownership in the country would provide huge opportunities for its Drive-Thru business.

"Our initial focus will be on Sinopec's service stations in Beijing, Shanghai and Guangzhou," Roberts said.

McDonald's already has three Drive-Thru outlets in Dongguan and Shunde in south China's Guangdong Province, and recently opened an outlet in Shanghai, in collaboration with Chinese home improvement group Oriental Home and real estate firm Pan-China.

The fast-food conglomerate plans to open several flagship restaurants in key cities by the end of this year; exact figures, however, were not disclosed.

McDonald's is eyeing Sinopec's retail network. As China's largest producer and marketer of both wholesale and retail oil products it currently operates more than 30,000 service stations throughout China and continues to grow at a rate of approximately 500 new outlets annually.

For Sinopec, "our need for professional and reliable business partners is underlined by the fact that we serve millions of consumers across the country on a daily basis," said Wang Tianpu, president of the oil giant.

Oriental Creation believed the alliance would help them enrich experiences and facilitate Sinopec's diversification of its non-oil business.

McDonald's, Sinopec and Oriental Creation all refused to reveal the combined funding for the Drive-Thru alliance, but said it is, of course, a decent investment.

Pei Liang, vice president of the China Chain & Franchise Association, said the alliance would be a win-win situation and could result in further cooperation and the sharing of resources such as brand value, business networks, capital and expertise.

(China Daily June 21, 2006)

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