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Annual report

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2019 Beijing Shougang Co., Ltd. Annual Report (excerpt)

Release Time:2020-06-09 14:28:30

Section 3 Company Business Overview

I. Major business of the company during the reporting period

1. As an enterprise in the steel industry, the major business scope of the company includes: iron and steel smelting and steel rolling processing; copper smelting and rolling processing and marketing; sinter, coke and chemical product manufacturing and sales; TRT and gas production and sales; processing and sales of industrial waste and foreign matters; sales of metal materials, coke, chemical products, mechanical and electrical equipment, building materials, general equipment, hardware, furniture and decorative materials; equipment rental (excluding automobiles); warehousing services; technology development, technical consulting, technology transfer, technical services and training; investment and investment management.

2. The iron and steel products at Qianshun Base include a hot-rolled and cold-rolled series of plate products. Of which, products from the hot-rolled series mainly include pickle plates, weathering-resistant steel, automobile structural steel, high-strength steel, pipeline steel and saw blade steel. Products from the cold-rolled series mainly include automobile plates, electrical steel, home appliance plates and special purpose plates. The iron and steel products from Jingtang Base also include hot-rolled and cold-rolled series plate products. Of which, products from the hot-rolled series are hot continuous rolling products like automobile structural steel, pipeline steel, weathering-resistant steel and high-strength steel, and medium and heavy plates like bridge steel, shipbuilding and offshore steel, wind power steel, construction steel with high performance and pipeline steel; products from the cold-rolled series are automobile plates, home appliance plates, special purpose plates, tin plates, chrome plates, color-coated plates and general plates.

3. The purposes of major iron and steel products include:

 (1) Products from the hot-rolled series 

Pickle plates are mainly used in automobiles, compressors, motorcycles, machinery manufacturing and hardware accessories. 

Automobile structural steel includes automobile wheel steel and automobile girder steel, which is for the manufacture of wheel rim spokes of cars, passenger cars, trucks, engineering machinery, agricultural vehicles and other vehicles, as well as structural members such as beams and longitudinal beams of various automobile frames. Pipeline steel is mainly for the transportation of oil, natural gas and other media. Weathering-resistant steel mainly includes container steel, weathering-resistant railway steel, mixing tank steel and power tower steel. High-strength steel includes steel for high-strength construction machinery, explosion-proof steel for safes and ATMs, fan steel, truck steel, etc. It is mainly used for the manufacture of jibs, car bodies and beams of cranes, pumps, special vehicles and blades of blowers, mining fans, electric fans, etc. Special purpose plates mainly include welded gas cylinder steel, boiler steel and pressure vessel steel, which are for the manufacture of vessels containing liquefied petroleum gas, liquid nitrogen and other gases, and pressure equipment of special equipment. 

(2) Products from the cold-rolled series

Automobile plates are mainly for the manufacture of automobile bodies, structures and some chassis parts of various types of passenger cars and commercial vehicles. Electrical steel includes non-oriented and oriented ones, which are mainly used in household appliances, industrial motors, small and medium motors, new energy vehicles, transformers and other industries or fields. Tin plates are mainly used for packaging food and beverages, as well as gasoline, grease, pigment, polishing agent, sprays and other chemical products. Chrome plates are mainly used for can tops, twist-off caps, dished covers, snap lids and drawn cans. Home appliance plates are mainly used for internal and external plates and structural plates in small home appliances like refrigerators, washing machines, air conditioners and televisions. Color-coated plates are widely used in the construction industry, shipbuilding industry, vehicle manufacturing industry, furniture industry, etc. Special purpose plates are mainly used for the manufacture of chain, enamel, welding wire, in barrel making, standard parts in motorcycle, etc.

III. Analysis of core competitiveness

1. Production equipment level

Qiangang Company owns 2 blast furnaces of 2,650 m3 in size and 1 blast furnace of 4,000 m3 in size. It has adopted many international cutting-edge technologies, including burden distribution of the large blast furnace, fully dry dedusting, pulverizing and tank injection, zero interval tapping, etc, meaning the company’s main technical indexes including coke ratio, coal injection ratio and blast furnace productivity stand at China’s very forefront. It has 5 converters of 210 tons, 4 double strand slab casters and supporting LF, CAS-OB, RH vacuum refining furnaces and a hot-rolled wide strip mill of 2,250 mm and a hot-rolled wide strip mill of 1580 mm; it is the first among domestic steel enterprises to realize “one-touch steelmaking”, “one-touch refining” and “automatic steel pouring”. Also, with the introduction of AI to steel production, the company also ranks top domestically in terms of technical equipment, energy conservation and environmental protection, independent integrated innovation, etc.

Jingtang Company has a coke oven of 7.63 m in size, the largest in Asia, a belt roaster with an effective baking area of 504 m2, two blast furnaces of 5,500 m3, two dephosphorization converters of 300 tons, three decarbonization converters of 300 tons, 4 slab casters, a hot-rolled wide strip mill of 2,250 mm and a hot-rolled wide strip mill of 1,580 mm, 6 cold-rolled wide strip mills and supporting auxiliary and public auxiliary facilities. It has adopted 220 advanced technologies, and its independent and integrated innovations account for two-thirds of all innovation. It has independently developed a converter interface technology for directly mixing molten iron into converter from the electric furnace, as well as desulfurization, dephosphorization and desilication steel making technologies, with the first clean steel production platform with high efficiency and low cost built in China. As the first steel mill adopting low-temperature multi-effect thermal desalination, its water recycling rate is over 97%. In phase II, there are 2x70-hole coke ovens of 7.63 m and supporting CDQ and flue gas desulfurization and denitrification facilities, 2 pellet production lines with belt roasters of 504 m2 and a blast furnace of 5,500 m3 in size.

Zhixin Company’s cold-rolled electrical steel production line has a continuous pickle rolling unit, a continuous annealing processing unit, a regular pickling unit, a twenty high rolling mill and other production units as well as public and auxiliary facilities such as pickle regeneration, with the overall standard equipment attaining a advanced world class standard. It gives priority to promoting the production, sales and R&D of steel for new energy vehicle motors, high-end variable frequency compressors, ultra-high efficiency motors, primary energy efficiency transformers and ultra-high voltage. It is the second electrical steel production enterprise with a special series of products for new energy vehicles (NEVs) in China. In terms of orientation, it has independently developed a low-temperature slab heating process to produce high magnetic induction orientation technology, making it the fourth enterprise in the world to achieve industrialization of full-low temperature processes.

Cold Rolling Company has integrated the most advanced production technology at home and abroad. The pickle rolling processing unit has adopted fully continuous production process technologies, like shallow groove turbulent pickling and five-stand six-roller continuous rolling mills, and also control technologies, like CVC plate shape control and AC-DC-AC frequency conversion speed control. The continuous withdrawal and galvanizing unit has adopted a new rapid cooling process suitable for the production of high-strength steel and ultra-deep-drawing steel plates. The highest strength level of the plates reaches 1,000 MPa. The company has the potential to further develop steel products with higher strength, with its overall technology and equipment ranking among the top across the world.

2. Technological innovation capability

Shougang Co., Ltd., Jingtang Company, Cold Rolling Company and Zhixin Company have all passed the national high-tech enterprise qualification certification.

Intellectual property: Shougang Technology Center was recognized by Beijing Enterprise Technology Center and won the title of “Beijing Intellectual Property Pilot Organization” and “Beijing Intellectual Property Demonstration Organization”. In 2019, Qianshun Base and Jingtang Base obtained 328 patent authorizations, including 141 invention patents, 186 utility model patents and 1 appearance patent. 32 of Jingtang Company’s patents won the “Project Award of National Invention Exhibition Innovation and Entrepreneurship Award”; Cold Rolling Company won the title of “Beijing Intellectual Property Pilot Demonstration Organization”; and Zhixin Company won the 3rd “Tangshan Mayor Special Award”.

Standard setting: The company has continuously promoted the transformation of scientific and technological achievements, with scientific research and innovation becoming an important driver of high-quality development. It has presided over and participated in the formulation of 12 national standards and 6 industrial standards, among which 3 national standards including the GB/T 4333.10-2019 Infrared Absorption Method for Determination of Ferrosilicon Carbon Content have been released and implemented. Three projects it has undertaken, including the “Intelligent Stability Control Technology for Narrow Window of Molten Steel Quality" with the Ministry of Science and Technology of China, are progressing smoothly, and 12 projects, including “Technical Research on Application of Electrical Steel Products for Intelligent New Energy Vehicles to Electric Motors” have achieved actual results.

Science and technology awards: In 2019, 7 of the company’s projects won Metallurgical Science and Technology Awards and 15 projects won Hebei Science and Technology Awards.

3. Product market competitiveness

Shougang Co., Ltd. initially launched 6 products and one them was launched globally. The company has won Dongfeng Nissan’s “CSP Platform System Special Contribution Award”, Great Wall Motor’s “Cost Improvement Award”, Midea’s “Sincere Cooperation Award”, Shanghai Highly’s “Best Strategic Partner”, Haier’s “Golden Cube” Platinum Award and Siemens’s “The World’s Best Supplier”. It has successfully hosted BMW media day, Nissan Shougang day, the 2nd Shougang Automobile Steel Technology Forum and other automobile plate EVI activities and was listed in “Top Ten Excellent Steel Enterprises” and “Leading Brands of Steel Works in Beijing, Tianjin and Hebei” assessed by CISA and the Chinese Society for Metals. 

Cold-rolled automobile plates: full coverage of the top ten key automobile companies in China with a steady increase in supply share whilst maintaining its current position as the top domestic supplier of BMW and Great Wall Motors, and doubling its supply to Japanese vehicles year on year. It has seen the achievement of full coverage of 1180 MPa grade brand, a detection standard proposal for high doi outer plates without an intermediate coat for the first time in China, and the stable batch supply of outer plates without an intermediate coat, 590/780 MPa high strength and high extension DH steel and galvanized multiphase steel HC780/980CPD+Z.

Cold-rolled electrical steel: including non-oriented and oriented electrical steel. 25SW1250H for high-end new energy drive motors was launched globally. It was decided that Shougang Co., Ltd. would be the only steel supplier for Volkswagen’s MEB project and scored first in German Siemens certification review of global electrical steel enterprises. Materials for 1000MVA/1000kV UHV large capacity transformer has been appraised; the main performance of new energy vehicle (NEV) products series with high magnetic induction, high strength and low loss has caught up with that of world-class enterprises; the company has obtained 14 new energy motor user certifications and supplied to 10 of them in bulk. Additionally, it has comprehensively promoted the product certification of Toyota, Nissan, GM and other passenger vehicle users.

Cold-rolled tin plates: successful development of steel TS550 for food can bodies and high elongation primary material for snap lids. The proportion of thin CA tin coated products reached 80%. Other major cold-rolled products: the share of home appliance plates in Haier, Midea, Hisense and other leading enterprises remained stable; special purpose steel, like needle steel, was supplied in bulk to 6 new products, and the company came out in front in terms of market share of double-layer welded pipes; the color-coated plates has successfully realized flower-free switching from zinc, aluminum to magnesium products, and the batch supply to Muyuan Company, a leading animal husbandry enterprise.

Hot-rolled pickle plates (automobile structural steel) have made breakthroughs in development with automobile companies such as BMW, Toyota, Honda and Nissan, and lightweight special pickle plates are supplied to Huawei’s 5G base station project. Other major hot-rolled products: successful development with 10 new brands in fine blanking steel including SAE1528B; stable supply of 700 MPa high strength automobile structural steel to Yutong Automobile, BAW Foton and Sunhunk; dual phase wheel steel launched in China has become the major product leading the lightweight upgrading of the industry; the mastering of a complete set of fire-resistant and weathering-resistant steel technology, and their successful application in the construction of ski jumping platform project of 2022 Beijing Winter Olympics; mass production of high-end coiled tubing CT 90.

4. Management innovation capability

With the comprehensive implementation of the independently created lean JIET management system, Qiangang Company has established an operation mode driven by production and operation, and improved precise management; it has established a “dual control” the operation mechanism based on informatization and intrinsic safety improvements, becoming an important participant, contributor and leader in the construction of the “dual control” mechanism in Hebei Province. It was rated as the only “national safety culture construction demonstration enterprise” across the whole process in the entire national steel industry. “Intensive Management of Production Lines with Remote Intelligent Control of Large Steel Enterprises” won the second prize of Hebei Innovation Achievements of Enterprise Management Modernization and “Construction and Implementation of Centralized Management and Control of Material Measurement in Super Large State-owned Metallurgical Enterprises” won the second prize of the 26th National Innovation Achievements of Enterprise Management Modernization. 

Jingtang Company’s “Construction and Implementation of Intelligent Training System for Skilled Personnel in Iron and Steel Enterprises” won the second prize of the 34th Beijing Innovation Achievements of Enterprise Management Modernization, “Innovation and Practice of Intelligent Management and Control in Large Coking Enterprises” won the third prize of Innovation Achievements of Metallurgical Enterprise Management Modernization, and “Construction and Implementation of Management System for Market-oriented Consistent Products in Large Iron and Steel Enterprises” won the first prize of the Hebei Innovation Achievements of Provincial Enterprise Management Modernization; “Construction and Implementation of Evaluation System of Skilled Employees in Large Enterprises Embodying Multiple Post Values” and “Practice of Quantitative Evaluation on Operation of Quality Management System in Large Iron and Steel Enterprises” won the second prizes of the Hebei Innovation Achievements of Provincial Enterprise Management Modernization; “High Efficiency and Intelligent Management Based on Reliability of Detection and Control of Large Blast Furnace” won the third prize of Hebei Innovation Achievements of Provincial Enterprise Management Modernization.

5. Talent cultivation capability

To become a leader in Beijing, Tianjin and Hebei’s national coordinated development strategy, a demonstrator of the integrated development of industry and city, and world-class high-end material service provider, the company insists that talent is enterprise’s primary resource, and emphasizes its enterprise mission, which is “excellence -- better quality, sincerity -- better service, goodness -- better growth, and beauty -- better environment”. It constantly consolidates its foundation and keeps easy access to “green channels”, three groups of talents to build a strong team with high-quality cadres and talents. Because the company adheres to the principle of “filling posts with suitable people and entrusting matters to capable individuals” and to shaping a positive atmosphere for talent growth, a number of leading talents in skill operation have emerged. Wang Rui won the champion of China Hotshot, Rong Yanming won the title of Chinese Technical Expert, Guo Yuming and Liu Jianbin were selected as national model workers, and Shang Guangpeng and Zheng Mingyue won the capital labor medals. To meet the needs of high-tech talent training and development, Wang Qiuna, Gao Qian, Liu Zhaoyue, Li Guanglin and Hu Zhiyuan were recommended to study for doctorates in first-class universities, like University of Science and Technology Beijing, Central Iron and Steel Research Institute and Beijing Institute of Technology, which will be a strong talent guarantee for the company’s sustainable and high-quality development.

6. Environmental protection strength

Adhering to green development, Qianshun Base has continuously improved environmental protection and ultra-low emission capacity, which makes it the only steel enterprise rated as Class A in its environmental performance evaluation in Tangshan for 2 consecutive years. In 2019, it passed the assessment and acceptance as an “ultra-low emission of iron and steel industry” by the Ministry of Ecology and Environment, becoming the first enterprise in China and only one in the iron and steel industry that has passed the assessment and acceptance of ultra-low emission throughout the whole process. This serves to provides technology and a practical reference for the green and sustainable development of the rest of the iron and steel industry. Also, it won the first prize of Science and Technology Progress of Energy Conservation and Emission Reduction evaluated by China Energy Conservation Association. In the same year, Cold Rolling Company was appraised as the national green manufacturing plant. 

Jingtang Base has always regarded environmental protection as a premise upon which the survival and development of enterprises depends, and vigorously implements its green action plan. In 2019, as it passed the ultra-low emission acceptance of Tangshan City, it was rated as a national “green factory” and “national green model organization”, and was awarded the Green Development Excellent Enterprise by China Metallurgical News office and www.csteelnews.com; CCPP was completed and put into operation. The company has built the world’s first model integrating “gas, heat, electricity, water and salt”, achieving the efficient recycling of low-quality energy.

Section 4 Discussion and Analysis of Operation

The company’s major accounting data and financial indicators. Operating revenue was 69.15 billion yuan, up 5.13% year on year; total profit was 1.997 billion yuan; net profit attributable to the shareholders of the listed company was 1.251 billion yuan; the earnings per share was 0.24 yuan, total assets were 141.371 billion yuan, and the owner’s equity attributable to the shareholders of the listed company was 27.029 billion yuan.

Production of the company’s major products. Qiangang Company: 7.71 million tons of iron, up 11.9% year on year; 8.1 million tons of steel, up 9.3% year on year; 7.79 million tons of materials (including 1.806 million tons from Cold Rolling Company and 1.809 million tons from Zhixin Company), up 11.1% year on year. Jingtang Company: 7.78 million tons of iron, up 3.0% year on year; 9.27 million tons of steel, up 13.9% year on year; 8.61 million tons of materials, up 11.9% year on year. Zhixin Company: 1.63 million tons of electrical steel, up 2.0% year on year. Cold Rolling Company: 1.699 million tons of cold-rolled plates, down 4.6% year on year. 

1. Fine manufacturing

1. Quality takes precedence. Qianshun Base has promoted the quality management in staff across the whole process and carries out a “100-day quality improvement” activity. The standard deviation of the width and the width extreme value of the hot-rolled outer plates takes the lead lead in China; the horizontal thickness difference of non-oriented high brand products of 0.35 mm is world-leading and the hot-rolled base material of oriented electrical steel can be produced in batches of 1.8 mm; the average value of carbon and oxygen in the whole furnace campaign is 0.0016. The defect rate of the outer plates for BMW cars have dropped, and the inner plates have achieved zero defects for 11 consecutive months. Jingtang Base has improved its entire procedure and entire benchmarking system process, and focused on production line process control. 34 of the 66 set targets were met or exceeded benchmark enterprises, an increase of 41.7% year-on-year; carbon and oxygen products of steelmaking decarbonizing furnace No.1 is 0.00156, reaching the international leading level; the rate of hot-rolled products of 2,250 mm has reached new highs, and the product influence has seen a steady increase.

Second, sticking to the fine products strategy. The market reputation of automobile plates, electrical steel, and tin plates are getting better. A pass rate of 99.3% in the automobile plate certification carried out by 29 users including BMW, Benz, Honda and BYD; only CR440Y780T-DH and CR780Y980T-CP are Benz certified in China. New breakthroughs have been made in the supply to Japanese products, and the exclusive monopoly of outer plates without an intermediate coat in China has been broken. 10 new electrical steel products have been developed and 25SW1250H for new energy vehicle (NEV) drive motors was launched around the world. The unit plant output of non-oriented electrical steel has been the world’s largest for 6 consecutive years. New energy channels were expanded as the company passed Toyota and Ford’s material testing. The market share of ultra-thin products of oriented electrical steel of 0.20 mm and below ranked first place in China for 2 consecutive years. The products have been successfully applied to Zhangbei-Xiongan extra high voltage project, Baihetan project with the largest total installed capacity in the world, Wudongde Hydropower Station and other national major projects. The basic purpose products of tin plates are 10% lower than that of last year. The proportion of products for milk powder, plating, beverages, and chrome plating has increased by 30%-70% compared with that of last month, and the ratio of orders with the overall thin specifications (≤0.20 mm) has reached 54%; the company has attracted users from Jiamei Group to form batch supply, which accounts for 99% of protein beverage iron; it has successfully developed T5CA for easy-open ends, which has passed the certification and achieved stable batch supply of such enterprises as Enpack, Xiangda and Example; it has completed the certification and small batch supply of high tin and low chromium iron for mushroom cans.

Third, continuing to optimize structure. The company adheres to supply side structural reform and rapidly promotes high-end products to enter the high-end market. The complex phase steel from Qianshun Base has been steadily supplied to BMW, pipeline steel has been supplied to the China-Russia east-route natural gas pipeline and welded bottle steel has had the largest market share in China for 9 consecutive years. High-end milk powder can steel and tin plates from Jingtang Base increased by 54%, hot-formed steel increased by 39%, Bondi automobile oil pipe welded steel increased by 30%, annual production of color-coated products reached 100,000 tons and the monthly production of zinc aluminum magnesium products was more than 7,000 tons.

2. Green manufacturing

Insisting that our green hills and clear waters are invaluable assets, the company has creatively established a complete set of ultra-low-emission technology for steel companies to ensure harmonious coexistence between steel production and the demands of environmental protection.

First, build an integrated management and control platform for intelligent environmental protection. The company has strengthened its control over unorganized emissions and for the first time used image intelligent recognition technology to control particulate matter emission. The effective collection of flue gas from the turntable of the large ladle of the continuous casting machine and the combination of the wet electric dust collector and the converter gas OG dust removal were achieved for the first time. The company has promoted the transportation of clean energy vehicles to create a new benchmark for green logistics. 17 electric heavy-duty trucks and 25 electric forklifts are operated for in-plant logistics.

Second, promote the application of green technologies. 9 energy-saving projects have been carried out, and the comprehensive energy consumption per ton of steel and new water consumption per ton of steel reached its best level in the company’s history. The company has promoted green development throughout products’ life cycles. With Shougang’s high-efficiency electrical steel, 5.4 billion kWh power were saved annually and carbon dioxide emissions were reduced by 1.73 million tons; the thickness of the paint film of car outer plates without an intermediate coat was reduced by 20%; ultra-high-strength steel of 780 MPa and above reduced the weight of the whole vehicle by 10%, and the corrosion-resistant container plates of 550 MPa and above reduced the weight of the box by 12%.

Third, achieving ultra-low emission throughout the process. Qiangang Company has completed ultra-low emission renovations and passed the assessment and acceptance of Tangshan City. According to the requirements found in the “Notice on Properly Evaluation and Monitoring of Ultra-low Emissions in Iron and Steel Enterprises” issued by the Ministry of Ecology and Environment, Qiangang has passed the assessment and acceptance of ultra-low emission across its entire process. After the announcement, it became the first company in China and currently the only enterprise in the steel industry which has passed the ultra-low emission assessment and acceptance throughout its whole process. Jingtang Company has always regarded environmental protection as the prerequisite for the survival and development of enterprises. It has passed the assessment and acceptance of ultra-low emissions in Tangshan City, actively responded to the pollution control measures on heavy pollution weather, successfully completed the blast furnace maintenance and production recovery during the National Day holiday and opened a new mode of green transportation from railways to terminals. Jingtang Company was rated as a national “Green Factory” and “National Green Model Organization”.

3. Smart manufacturing

First, the production and marketing integrated management and control platform was launched. The company has introduced advanced industry practices into the integrated production and marketing system to promote ecological changes in management through information construction. The aim is to integrate production and sales, management and control, business and financial across multiple manufacturing bases and regions and enhance manufacturing and service capabilities. The company has continuously improved its system functions to get a better application outcome. The efficiency of contract issuing was increased by 60%, contract processing time was shortened by 80%, 100% of steel-making slabs were attached to orders, the ratio of semi-finished product inventory production was reduced by 3.4%, and 99.3% of financial vouchers were automatically generated. 

Second, promote the construction of smart factories. Qiangang has gradually formed a promotion model led by the construction of a cold-rolled smart factory and driven by a multi-project cluster of major processes. As its intelligent manufacturing capabilities are continuously enhanced, the company’s role as a model to the industry becomes apparent. The overall technology of the smart factory built on the core of customized production, integrated logistics, full process control and intelligent equipment, and has reached China’s advanced level. It has 18 patents and 13 registered software copyrights. 6 of its achievements have been promoted and applied in different 7 enterprises within the industry. 18 intelligent upgrade and transformation projects of the major process are under construction. 4 new robot application scenes, like the self-developed steel coil unbundling belt and steel coil inner ring fixing, have filled the previous void in this field in China.

Third, promote the application of big data. The operation decision analysis system was successfully launched, laying the foundation for promoting management and business reform; projects such as replacing workers with robots and key reservoir intelligence have been implemented, and smart manufacturing has been promoted comprehensively, from ‘point’, to ‘line’, to total ‘surface’. The unmanned warehouse at terminal No.5 was rated as the pilot project of Tangshan’s Integration Development of Internet and Manufacturing.

4. Lean manufacturing

First, reduce costs and increase efficiency of all factors. The blast furnace has achieved a high level of smooth production, its new record level; flexible continuous casting technology has been developed in steelmaking, with the highest continuous casting of 508 furnaces, setting a new record; production of oriented electrical steel increased by 29,000 tons; the proportion of high-premium products from the Cold Rolling Company, like those for Japanese enterprises, outer plates, and GA, increased by 2%, an increase in production and efficiency. The company has strengthened management and reduced costs, made a good combination of “substitution, modification, reduction, expansion and increase”, and reduced outsourcing costs; it has promoted the localization of spare parts, strictly implemented bidding procedures, and reduced repair costs; it has reduced period costs with low interest replacement and reasonable renewal; it has deepened market-oriented operations and systematically coordinated to reduce raw material costs, optimize product mix, expand resource recycling and reduce comprehensive costs, achieving a cost reduction of 6.4 billion yuan throughout the year.

Second, comprehensive and intrinsic safety management. Qianshun Base has continued optimizing intrinsic safety management and improving the emergency management system. It has created a seven-step method and double prevention mechanism, strengthening the management of relevant parties. As it focused on safety culture construction, it was awarded the only “safety culture construction demonstration enterprise” across its whole process in the entire national steel industry. Jingtang Base insists on eliminating safety risks at the source and comprehensively promotes intrinsic safety management, achieving remarkable results in multiple regions and multiple systems, especially cold-rolled and belt transportation system; close attention has been paid to the implementation of safety responsibilities by integrating the safety management system with enterprise standardization. It has promoted the cultivation of internal teachers for intrinsic safety training and created a complete safety evaluation system, gradually making safety management more scientific and independent.

Third, lean management of the whole process. It has created a lean JIET management system that fits in with the characteristics of the company’s shares, centered on “economic and punctual” delivery, established a operation mode driven by production and operation, continuously improved the Six Sigma application system, strengthened the “lean” awareness and management awareness of all employees, and narrowed the gap to benchmarking and operated according to approved plans. 107 Amoeba operators have been established, 474 lean and rapid improvement projects and 372 focus projects have been implemented throughout the year, and 41 spare parts repair rooms have been established.

5. Precise services

Improve the construction of the service system. The company has carved out a comprehensive advantage in “manufacturing and service” with precise services, and a customer ecosystem characterized by openness and sharing, interconnectivity, and co-creation of value.

First, deepening technical services. Focusing on being “discoverers of customer needs, organizers of technical services, and supporters of product optimization”, the company continues to strengthen technical exchanges with users around new material applications, design optimization, process improvement, and technology cost reduction and integrating production, sales, research and service resources, creating an integrated user service model. Digging deep into users’ uses of new processes, new uses, and new needs, it has developed customized and personalized product designs around new features such as accuracy, ingredients, performance, uses, etc. It has provided users with personalized solutions through products, standards and service upgrades and overall improvement. Throughout the year, 1,845 parts certification opportunities were offered for automobile plates; 33 EVI projects were carried out, and 1.72 million tons of EVI were supplied.

Second, improving service capacity. The company has promoted the construction of classification, zoning, and grading service systems and built a centralized and consistent information sharing service platform to form a full closed-loop management of customer demands. With the instant review of conventional contracts, the proportion of technical inquiries was reduced to less than 3%. Thus, the efficiency of the marketing system’s responses to users has been improved significantly. Adhering to the market orientation, it has improved market frontier service capability. Also, by fitting in with the direction of high-end products and channels, it has strengthened personal services, established and promoted automobile outer plate processing instruction manuals, coordinated and optimized service resource allocation and built exclusive service teams for key customers. The service coverage rate of automobile plate OEMs in the factory has reached 89%.

Third, improving guarantees. The company has launched production, sales and decision support, a 3PL logistics collaboration platform, a smart marketing platform, marketing industry and trade management and other systems, and also achieved function docking with peripheral systems; it has improved the allocation of first-line service resources, strengthened production line resources and the balance between hot-rolled and cold-rolled products and contract organization, actively merged small orders, promoted the mutual supply between Qiangang Company and Jingtang Company, and improved product supply capacity by expanding continuous pouring and process consolidation to improve product supply capacity. The contract fulfillment rate for the whole year reached 95.7%, and the complete order fulfillment rate for key customers was 93.3%; the company has established an emergency guarantee mechanism for transportation to provide customers with professional personalized logistics services to meet emergency contract delivery.

6. Strengthen foreign investment management and control

Foreign investment has focused more on major business. The company has strictly controlled the scale of new investment, continued strengthening the management of foreign investment, and laid a solid foundation for investment risk prevention and control. During the reporting period, it has obtained an investment dividend income of 202.03 million yuan.


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