1、Interview- Baosteel,May 16, 2009,Establishment,Baosteel Group Corporation was founded as Baoshan Iron & Steel General Works in late 1970s as a large-scale state-owned modernized iron and steel enterprise. At that time, Shanghai Municipal Government and State Ministry of Metallurgy proposed to build
2、a modernized iron production plant in Shanghia to correct the imbalanced iron supply, as every year Shanghai-based steel mills had to source approximately 3 million tons or iron from other provinces Therefore, the state council started to explore into the idea and send delegations to investigate ste
3、el industry development in developed countries, particularly in Japan.,Establishment,At the beginning of 1978, final strategic decision was made to build Baostell in Shanghai, the location enables Baosteel to get easy access to overseas iron ore resources as well as customers; it also obtains many c
4、ompetition advantages such as good technical basis, excellent human resources, easy transportation, and a huge market. After two years preparation, the construction officially started on December 23rd, 1978, just one day after the Third Plenary Session of the 11th Central Committee of the CPC.,Diffi
5、culty from the Outset,At the outset we started from scratch on a farming land covering about 19 square km along the Yangtze River. Most of the facilities and equipments had to be imported from Japan and Germany; unfortunately, the project was once suspended in 1980 due to lack of fund. Instead of gi
6、ving up, Baosteel employees devoted all the energy and enthusiasm to fight the challenge. Under the help of central government, the Phase I Project completed in September 1985, which designed steel capacity of 3.12 million tons per annum. Lao Tze,Difficulty from the Outset,But the situation is much
7、better in Phass II and Phase III Project. By building many new processing lines, Baosteel gradually increase the percentage of downstream products and began to supply hot rolled, cold rolled and pre-painted steel in a wide variety of specifications. The capacity exceeded 10 million tons in 2001. How
8、ever, we didnt stop the pace, another round of construction started after 2001. Many key projects including No. 4 blast furnace, heavy plate mill and No.3 HR mill were built in the last five years in order to achieve higher capacity and better quality.,Merge,Merge with Shanghai Metallurgical Holding
9、 Group and Meishan Steel is encouraged by the local government with a purpose to consolidate the steel industry in Shanghai and promote the efficiency of old steel mills. The merge is officially announced on November 17th 1998, turning over a new leaf for the development of steel industry in this ar
10、ea. The SMHG traces its history to century ago, so it was money-losing as frustrated by heavy legacy burdens. Baosteel had to spend hundreds of millions yuan and huge efforts on technical revamping, staff relocations and management integrations. Now most of the old facilities have been rebuilt, and
11、the number of staff is cut to less than 90 thousand from 176 thousand.,Merge,If we look at the bright side, the merge brought stainless steel and special steel to our existing product mix, and greater size result in synergies across a range of functions. More importantly, from the merge we gain expe
12、riences that would be helpful in the future. On the other hand, integration is a difficult and time-consuming process. It took us at least five years to share one vision, operation as one company, commit to one standard, and implement one strategy. Standard & Poors cut Baosteels credit rating right
13、after the merge, but now the rating is even higher than what we had before the merge. See the glass as half full/empty Optimistic/pessimistic Every cloud has a silver lining,Impromptu Preparation,Instructions: 5 minutes to get ready for each question regarding corporate information. Say something about the establishment/history of Baosteel. Can you tell me the difficult phases Baosteel has gone through? Whats the advantages and disadvantages of the merge?,
