General Manager of Wuhan Iron & Steel responds to pig raising vegetables: Moderate multiple development

In response to the current rumors of the rumors of WISCO's "pitting vegetables," National People's Congress, Deng Gang, general manager of Wuhan Iron and Steel on the 7th told reporters that this is the iron and steel industry to do fine, while strengthening, and moderately diversified development of related industries.

Deng Qilin said that for two consecutive years, the annual sales margin of China's steel production industry has been less than 3%, far below the average profit level of 6% in the national industrial sector. Especially in the fourth quarter of last year, this figure dropped to 0.4%-0.5%, and the benefits of the steel industry fell to its lowest level since 2008. WISCO stood out from the top, rising in contrarian conditions, with sales revenue and profits increasing by 14.3% and 17.4% year-on-year. Among them, the "related industries" other than steel, realized operating income increased by 17% year-on-year and realized profits of 2.1 billion yuan.

In view of the severe situation of the Chinese steel industry, Wuhan Iron & Steel will adjust its industrial structure and will focus on promoting the transformation from simple production and management to quality and efficiency. From one industry to the other, the industry will change from one industry to the other, and from the inland. Change to coastal and foreign development.

“Pigs and Vegetables” is only part of “relevant industries”. Deng Qilin said that in the next few years, Wuhan Iron & Steel will invest 39 billion yuan to develop mineral resources and steel (4282, 36.00, 0.85%) deep processing and international trade around the supply chain. Industry; development of engineering services, logistics services, financial services industries around the production chain; development of high-tech industries and green farming industries around the value chain. At the end of the “Twelfth Five-Year Plan” period, the total planned revenue of Wuhan Iron & Steel will reach 3.6 billion yuan, and the non-steel industry will receive more than 110 billion yuan in revenue, accounting for more than 30% of the total.

Regarding the relationship between the "related industries" and the main business of iron and steel enterprises, Deng Qilin said "can't jump out of the basics." As the backbone of the Chinese national economy, state-owned enterprises, as the backbone of the steel industry, and Wuhan Iron and Steel are the first to stand on their front lines. While the iron and steel industry is doing fine and strong, it also moderately diversifies the development of related industries.

Deng Qilin introduced that advanced steel companies at home and abroad have generally extended the resource chain, product chain, and technology chain, developed related industries, and opened up new economic growth points. ThyssenKrupp, Germany’s largest steel industry group, accounts for 50% of the non-steel industry, among which elevator manufacturing has become one of the top three producers in the world; Japan’s largest steel company, Nippon Steel, also has a non-steel share. About 40%.

It is reported that in recent years, Wugang’s “non-steel rice” has become more fragrant, including overseas iron ore bases, engineering design and construction, machinery manufacturing, transportation, logistics and warehousing, terminals, natural gas, and investment financing. In particular, iron ore has become the largest investment in the development of “related industries” at present. Through acquisitions, mergers, and equity participation, WISCO invested and developed eight overseas iron ore development projects in Canada, Brazil, Australia, Liberia, etc. at low cost, and locked overseas resource amounts to several billion tons. In 2011, it returned 7.07 million tons of equity ore.

At the end of February this year, Wuhan Iron and Steel signed a strategic cooperation framework agreement with China Resources to enter the natural gas field. Wugang Logistics Group will also achieve various operations such as green farming, hotel properties and beverage production.

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