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Four great tricks in the era of meager profit, let steel enterprises successfully transform and survive
In the fourth quarter of 2011, the steel industry seems to be repeating the mistakes of the second half of 2008: demand is shrinking, steel prices are falling, profits are falling, and the main steel production industry is almost in full loss. Moreover, the crisis is facing more tests than in 2008: steel production capacity is greater, raw fuel prices are higher, and resource and environmental constraints are stronger. According to China Steel Association, the loss situation of the whole industry in January this year was more serious than that in December 2011. The author recently walked into Hebei Iron and Steel Group Co., Ltd. to see this production line that has both world-class production of high-end products and a large number of production lines for ordinary products. The company has a huge capacity of 50 million tons and is struggling with profit margins. How to adapt and adjust in the face of adversity. 1. Controlling production capacity: “Twelfth Five-Year Plan†no longer increases one ton of production capacity In the interview of Hebei Iron and Steel Group's production and operation, the author heard the most words “profitâ€. The head of the Group's marketing department said that they will announce the profit rankings every week, so that the profitability of each branch is clear. Ren Zhigang, the dispatching director of the Group's Handan Iron and Steel Company, said that production is not necessarily much more profitable, and production should be organized on the principle of maximizing benefits. The person in charge of the sales company said that the order is not measured, but the profit graph. Indeed, the "micro-profit era", the profit is king. In Hebei Iron and Steel Group, “micro-profit†directly led to the traditional production organization principle of iron and steel enterprises, which was gradually fixed by profit. Not blindly pursuing production is an intuitive manifestation of profit production. At present, the market price of most steel products has been squatting on the cost line for a long time, and it is not a profit for steel mills to sell products. On October 26 last year, Handan Iron and Steel, the main steel mill of Hebei Iron and Steel Group, took the initiative to repair a 3,200 cubic meter blast furnace that should be overhauled at the end of December, so that it could reduce production by 8,000 tons per day. Market volatility and steel prices fell, and production resumed at the end of the year. "There is no order, but because there is no profit to voluntarily give up some orders. Although all the blast furnaces started production in January, the production plan is still reduced by 50,000 tons compared with the same period of last year." Ren Zhigang introduced. In fact, as early as the establishment of Hebei Iron and Steel Group three years ago, the idea of ​​benefit-led has been established. Chairman Wang Yifang recalled: "The establishment of the Group is the largest steel enterprise in China, but we never dare to call the 'Boss'. The reason is that we are mostly low-efficiency production capacity, the product grade is not high, and the benefits are not good. Can't be called 'Boss'." "The decision-making level of the group realized that it is no longer possible to rely on the old road of expanding scale to make money. Otherwise, the more production, the more losses, the loss of money, and the busy work." Wang Yifang said. In 2011, Hebei Iron and Steel Group officially proposed that “there will be no increase of one ton of production capacity†during the “Twelfth Five-Year Plan†period. In the workshop of the three rolling mills of Shigang Company, the worker master told the author that it was once the production line of Pudong Steel with an annual output of 940,000 tons. It is a famous “Asian demonstration factoryâ€. Even so, in order to cope with the adjustment of the company's product structure, the plant has all been converted to special steel production, although the output is not as good as before, but the benefits are much higher than before. “Analysis of the current profit winter, the imbalance between supply and demand is the main reason.†Wang Yifang said. He believes that serious structural overcapacity will lead to a fundamental improvement in this situation in the short term. "In addition to the long-term mental preparation, we must learn to differentiate the competition and improve the service level, in order to survive in the overcapacity environment." Wang Yifang said. 2. Adjusting the structure: taking the road of specialization, quality and differentiated competition In the next door of Shigang's three rolling mills, a silver-light steel production line is under intense adjustment. "In the future, we can produce dozens of different specifications of silver-light steel. After surface polishing, the price per ton can be increased by more than 1,000 yuan." Song Yibing, deputy manager of Hebei Iron and Steel Group Special Steel Sales Company, said. In fact, the Group has been committed to product structure adjustment since its establishment more than three years ago. At the beginning of its establishment, among the products of Hebei Iron and Steel Group, “Large Road Goods†occupied half of the country, and the steel subsidiaries of the Group were forced into a meager profit pattern. After continuous adjustment, Hebei Iron and Steel Group has more than 10 products to fill the domestic gap, and cumulatively developed 469 new products such as X100 pipeline steel and HBW1000 non-oriented electrical steel. The proportion of high value-added steel is over 60%, of which high value-added Automobile plates are exported to the European market in bulk. Only six product development projects just accepted by Hebei Iron and Steel Technology Research Institute have already produced more than 40,000 tons of variety steel, bringing benefits of 4.75 million yuan to the group. Ren Zhigang told the author that in 2011 alone, the output of new products of Handan Iron and Steel reached 2.45 million tons, an increase of 33.9% year-on-year, and an increase of 137 million yuan. "For a long time, the industry's understanding of transformation and upgrading is not clear, but the development experience in recent years tells us that in addition to promoting energy conservation and environmental protection, it is necessary to carry out product structure adjustment, product quality upgrade, and the results of transformation and upgrading will eventually It must be reflected in the efficiency of the enterprise." Wang Cheng, a researcher at the Development Research Center of the State Council. "In the face of a new round of market harsh winter, the product structure adjustment can only be strengthened and can not be weakened." Wang Yifang said. He introduced that nowadays, “big road goods†still account for a considerable proportion in the product structure of the group. The pace of increasing the added value of products and promoting the upgrading of product structure cannot be stopped; high-end steel also has overcapacity, and the competition for homogenization is becoming increasingly fierce. Different types of competition can be achieved by developing the rhythm of the variety and improving the quality of the product. The company has newly established Hebei Iron and Steel Technology Research Institute to provide technical support for product structure adjustment, which is its main task. "Product structure adjustment should be forward-looking." Zhang Xiaoli, president of Hebei Iron and Steel Research Institute, believes that some products now have small market demand and low profits, but the market potential is huge, and such varieties should be developed; some products will not be profited in the short term. There will be a big improvement, but there are needs for superior customers. In order to maintain a long-term stable strategic partnership, such products should also be developed. "At present, the contribution rate of new products to sales reaches 13%, and the proportion of high-end steel products reaches 63%. Only by taking the road of specialization, quality, and differentiation, can we gain competitiveness." Wang Yifang said. 3. Enhance management: Management is a company that always wants to read a good job in the production workshop of Hebei Iron and Steel Group. From time to time, the author feels the strong impact of the deterioration of the market situation on production management. “The quality objections raised by downstream customers have increased significantly, and even small scratches that do not affect the performance of the products have to be returned as quality objection products.†Jia Lijun, the mill leader of the three steel mills in Shigang, said. "The original planning of rolling steel is thousands of tons and hundreds of tons. Now the varieties are subdivided. The orders are ten tons and twenty tons. In the past, it was often an order for ten days, and the specifications were not changed for ten days. No change in steel; now, I change dozens of steel grades a day. I changed more than 50 steel grades one day yesterday and completed more than 30 orders." Qin Shengping, chief engineer of Shigang's three rolling mills, said. As early as in response to the impact of the 2008 international financial crisis, Hebei Iron and Steel Group put forward: "The battle with the crisis, the fight is the internal strength, the fight is the management." Three years, "grasping the details, grasping the depth, grasping the implementation" of the refined management Hebei Iron and Steel continues to advance. Some indicators that could not be reached in the past and the specifications that cannot be produced are all due to the management work in place to achieve a big breakthrough. The three steelmaking plants of Handan Iron and Steel Co., Ltd. passed lean production, saving 245 seconds per furnace. The hardcover class staff of the subordinate steel bar line factory will assemble the size of the roller box to within 0.02 mm, which is only equivalent to 1/3 of a hair strand, but it will reduce the burning of the roller box by nearly one million yuan. Nowadays, the loss of haze once again overshadowed the industry, and Hebei Iron and Steel Group continued to promote cost reduction, efficiency and potential efficiency. In Handan Iron and Steel, without affecting the quality of the products, the workers increased the amount of domestic iron fines, used to stabilize the rising high-priced imported ore, and reduce the cost before the iron by 100 yuan per ton; in Tangshan, The recycling of iron-containing waste materials has been continuously enhanced. Last year, it has saved 59 million yuan in procurement expenses. In Xuanhua Iron and Steel, through the “secondary market forced†mechanism, the logistics cost of tons of steel dropped by 70 yuan. In fact, to resist losses, companies must always read a good book is management! How much benefit can management produce? Zhang Yingqiu, the finance minister of Hebei Iron and Steel, calculated an account: The group has been established for three years. With the fine management, they have accumulated a total of 27.3 billion yuan in diminishing income and reducing profits, and the cost of the same caliber has reached 19.8 billion yuan! 4. Extend the industrial chain: World-class steel enterprises do not have “single steel and a bowl of riceâ€. The main profit of the steel industry is not good. It is focused on finding a new profit growth point from the non-steel industry while strengthening the main steel industry. Nowadays, the non-steel industry of Hebei Iron and Steel Group has begun to take shape: the sales of bulldozers is the second in the country, the output of iron concentrates is the second in the country, and the iron ore resources of 5 billion tons are controlled, and the ore with an annual throughput of 50 million tons is built in Huanghua Port. Berths and 20 million tons of general-purpose berths. Wang Yifang said: "The world's leading steel companies do not eat a bowl of rice." He often mentioned an example. The German steel company ThyssenKrupp produces elevators and has now developed into the world's three largest elevator and escalator producers. one. The opening and closing of the production model makes the steel industry inherently have the advantage of the development of the entire industrial chain. Wang Yifang introduced, roughly estimated that each ton of steel should consume 1.7 tons of iron concentrate, consume 500 kWh of electricity, and require more than 4 tons of incoming plant logistics support. According to the calculation of 50 million tons of production capacity, the production scale of any one link is huge enough to form a scale advantage. "Today, the main business of steel is difficult to operate, and the non-steel industry in the industrial chain should do more." Wang Yifang said. According to the strategy of “Steel-based and moderately diversified†of Hebei Iron and Steel Group, by the end of the “Twelfth Five-Year Planâ€, five major industrial sectors of steel, logistics, resources, finance and machinery manufacturing will be built to form a industry-oriented and multi-dimensional industrial structure. The non-steel industry segment's operating income reached 140 billion yuan, and it has built a "domestic leading, world-class" steel enterprise. Taking steel as the core for the exhibition, deferring and expanding, and cultivating new profit growth points is not only the need for enterprises to find profits, but also the guarantee for the healthy development of the steel industry. "To the end of the 'Twelfth Five-Year Plan', we will have 35 million tons of iron concentrate capacity, 40% of the ore-producing ratio, and actively occupy overseas iron ore resources, and the ratio of equity to mine will reach 20%. By then, the dependence on imported minerals will be Further reduction." Wang Yifang said.