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XuLeJiang: what are the odds of Baosteel's "new six-year plan" being internationalized again

On June 17, XuLeJiang, chairman of Baosteel Group Co., Ltd., appeared at the South Xinjiang project base of Bayi Iron and Steel Co., Ltd. in Xinjiang. On the same day, he changed the management team of Bayi Iron and Steel Co., Ltd. and signed a "military order" with the new team. This is the first stop for Baosteel Group to implement the tenure system in its subordinate branches this year. The South Xinjiang project base of Xinjiang Bayi Iron and steel is the product of Baosteel's last round of six-year planning, with a total investment of 8.781 billion yuan and a production capacity of 3million tons. The iron and steel project, which was originally planned to be put into trial production in the second quarter of 2013, has been put into operation in advance at the end of March this year. Although 3million tons is less than a fraction of Baosteel's 2012 target of 80million tons and 2015 target of 66million + a tons, the "Baosteel speed" of capacity expansion may be over when the aging temperature is between 690 ~ 720 ℃

in the same month, Baosteel's new annual strategic development plan was released. Baosteel's future production capacity target, according to insiders, "with Zhanjiang project, the maximum is 58million tons. No more tons will be added."

Baosteel's last six-year plan was formulated at the end of 2006. According to Wujun, the head of Baosteel's planning department, "it was actually a plan for scale expansion. At that time, the domestic iron and steel industry was still expanding in scale, that is, grabbing territory."

now Baosteel has decided to take back the foot of capacity expansion. XuLeJiang chose to announce to his peers on the day of grain in ear on June 4 that Baosteel is about to enter a new track. The seeds he sowed for Baosteel are: stick to the main industry of steel, but shrink the steel production capacity, use the Internet to improve the added value of steel products, and start planning to build Alibaba [microblog] in the steel industry

this is not new. Minmetals, Hebei Iron and steel, Shougang, and intermediary service providers such as Xiben Shinkansen are all doing it. Just like the capacity expansion and merger and reorganization eight years ago, e-commerce in the steel industry is evolving into a new round of feudal scuffle brought about by repeated construction. Baosteel differs from them temporarily in that it holds the only third-party payment license in the industrial field

in addition, at the Shanghai International Metallurgical Industry Exhibition on the same day, XuLeJiang and hewenbo, general manager of Baosteel, didn't say anything, but there are two plans under discussion: one is to deploy in the international market, and they are looking for partners in the United States to build a "post warehouse" for American automobile manufacturers; Another novelty is that they are considering launching the automobile aluminum plate project. A steel producer is going to start cross-border aluminum business

main business, going to sea again

Baosteel's transformation began with its main business. The pressure came from Shanghai Volkswagen, general motors and other automotive customers. Baosteel held several meetings at their request

automobile manufacturers need Baosteel to provide automobile materials with lighter weight but higher strength, but if they only revolve around steel, there is little room. The conclusion of these meetings is that what these car users need is actually a function, not a steel plate. Baosteel insiders said, "Baosteel should think about whether steel is the most effective and economical functional material for users. If not, we will provide them with materials other than steel."

now, Baosteel is planning to make aluminum sheets for automobiles. They are looking for partners. They have communicated with Chinalco Southwest Aluminum Co., Ltd. at the technical level to see the possibility of cooperation. The above-mentioned Baosteel insider said, "we have made preliminary contact with Chinalco, and we are also looking for potential partners, hoping to make use of the technical advantages of both sides to cooperate. Of course, it will take some time from technology discussion to product innovation to business building."

XuLeJiang believes that these changes are necessary. In his speech on June 4, XuLeJiang said that iron and steel manufacturing has entered the era of low profit, forcing Baosteel to move towards the road of service transformation. The core business of service-oriented enterprises is to meet customer needs, and the profits come from long-term continuous service

in addition to the transformation of materials, Baosteel also hopes to make a difference in the international market, because the construction of Zhanjiang project has further intensified the competition in the domestic market. Wangliqun, the former assistant general manager of Baosteel Group, said that the Zhanjiang project that has been started, whether in terms of production line or product structure, is basically no different from the current Baosteel shares

internationalization is becoming one of the strategic goals of Baosteel in the next six years. Wujun, head of the strategic Department of Baosteel, told the economic observer, "the basic requirement for internationalization is to do what we are good at. What we are good at and competitive internationally are silicon steel and cold rolled sheet. We are confident that we are internationally competitive in these areas. First of all, we need to find regional markets."

so far, Baosteel has found a regional market in the Americas, more specifically the United States, because it is the largest consumer market for sheet metal in the world. According to the data collected by Baosteel researchers, before the 2008 financial crisis, the United States needed to consume 17million tons of thin plates every year. Although it dropped to 9million tons at the time of the crisis, it has recovered to the level of 14million tons last year. Baosteel is looking for a strong partner to make a joint venture with Baosteel, making it possible to become a back warehouse for American automobile factories. Baosteel Group aims to achieve an 8:2 ratio of sales revenue in China and overseas in six years

this is actually a very confusing slogan. Over the past ten years, countless enterprises have failed in their internationalization. A recent example occurred in Angang. In may2010, Angang Steel signed a package cooperation agreement with American Steel Development Corporation. Of the four screw thread steel mills and one electrical steel mill planned to be established by the two sides by stages, the first screw thread steel mill will be jointly built with Angang in Mississippi, the United States. But a few months later, the plan was strongly opposed by 50 members of both parties in the United States, because "this will make the U.S. steel market plundered by Chinese enterprises and endanger the national security of the United States."

Baosteel itself has suffered from overseas investment. In june2012, the National Audit Office reported on Baosteel that by the end of 2010, the overseas investment project of Baosteel's Brazilian slab plant had lost 35.5481 million yuan due to insufficient project feasibility study; Meisteel's second phase caster project faces a loss of 101million yuan; The pellet project with an annual output of 5million tons has not reached the expected goal

what's the odds of going to sea again? XuLeJiang and hewenbo didn't give any hints. They prefer to talk about another version of the new Baosteel, that is, e-commerce

steel e-commerce latecomers

as early as the end of April, hewenbo introduced Baosteel's development plan for the next six years at the investor meeting held in Beijing. At that time, e-commerce and it were the focus of his promotion

he made an image analogy to investors. Steel is the backbone. Now Baosteel has decided to insert two wings into the backbone, one with two wings. Specifically, Baoxin software and Shanghai Iron and steel trading center

Baosteel software was founded in April, 2000 by Baosteel Co., Ltd. and listed in April, 2001. This is a company that mainly provides information solutions, automation system integration and operation and maintenance services for iron and steel enterprises, urban intelligent transportation and other fields. Huxuefa, assistant general manager of Baosteel Group, said that after more than ten years of exploration and accumulation, Baosteel software is about to usher in a period of leapfrog development

Shanghai Iron and steel trading center was officially launched on May 31 this year. It is a platform that hides many ambitions of Baosteel. It is said that the establishment of the platform was due to a question from XuLeJiang: why can't the Internet bring convenience to the steel industry after so many excellent enterprises have been achieved in the past ten years

Baosteel hopes to introduce the mature B2B e-commerce model into steel sales, so as to create a digital warehousing, logistics and sales tool for Baosteel and even the whole steel industry

huxuefa, assistant general manager of Baosteel Group, said that e-commerce is to transform the main iron and steel industry from manufacturing to service, that is, how to apply such a powerful tool as Internet to the iron and steel industry. In this way, Baogang will respond more quickly and sensitively to the needs of the market and users, reduce costs and improve efficiency. Baosteel's entry into e-commerce is based on such considerations

although the e-commerce platform was officially launched on May 31, Baosteel has actually tested it on automotive customers. Internally, they describe it as "the whole supply chain of the automobile factory is equipped with a nervous system". Next, Baosteel plans to apply this platform to its home appliance customers. According to Wujun, head of the planning department of Baosteel Co., Ltd., the system on the platform enables Baosteel and customers to see the inventory, price and even logistics distribution information of the whole production line at any time, and can mobilize the inventory products in the shortest time

Baosteel aims to achieve an annual trading volume of 50million tons by 2017, with more than 70000 trading members and an annual financing scale of 20billion yuan. 324 gymnasium Baosteel hopes that by 2018, the revenue generated by e-commerce will account for more than 20% of the total sales revenue. The previous formulation is more radical, which is to achieve more than one-third of the total sales revenue of e-commerce

this is not a simple thing. To use e-commerce to sell steel, it is necessary to standardize all steel varieties first, and then establish enough hasty logistics distribution stations. This means the reconstruction of the traditional steel distribution system. In the steel industry, it is far from an enterprise to complete

Wu Jun said that the electronic trading system itself may not require much investment, but to achieve this goal, Baosteel needs to lay more logistics centers and channels, build more cutting centers, and build a new logistics and distribution system around its core users. All these need investment. When they are mature, they hope to provide services to other companies and enterprises

XuLeJiang once announced in a provocative tone that "the era of steel e-commerce has come", but in fact, for the steel industry, Baosteel is already a latecomer in the field of e-commerce

in the last two years, Minmetals and Hebei Iron and steel have begun to deploy e-commerce business. Yaoziping, chairman of Minmetals development, even regards e-commerce as the key to the success of Minmetals' transformation. However, the development of Minmetals, which has been done for more than two years, has not yet seen the dawn of e-commerce in the iron and steel industry. One of the feelings of Minmetals insiders who have first tasted the taste of e-commerce is that "it is not possible to hear a sound when 50 or 60 billion dollars are thrown in"

Baosteel encountered repeated construction and competition in the industry as soon as it was ready to take off, but Baosteel was still infatuated. Baosteel believes that e-commerce is of great strategic significance to itself and can even be regarded as a springboard for Baosteel to transform from products to services

recently, Xu Lejiang and he Wenbo have told the most stories about the new Baosteel to the outside world

wait and see

aluminum plate, the United States, e-commerce... Baosteel's new six-year plan sounds strange. Unlike most domestic steel mills that follow the national five-year plan, Baosteel as a whole is trying to promote China to the "road of rejuvenation". The planning period is from 2013 to 2018, in which

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