TISCO accelerates the reform of state-owned assets and state-owned enterprises to fight the market "cold winter"

In the face of the steel industry's severe overcapacity and the continued decline in steel prices, Taiyuan Iron and Steel (Group) Co., Ltd. (hereinafter referred to as “Taigang”), as a large-scale steel conglomerate and a leading stainless steel company, has deepened its market in the past two years. The reforms oriented by the reforms stimulated the dynamics and vitality with the reforms, and the various operational indicators continued to improve. The actual actions were used to hand over a qualified answer to the employees and the society.

Employees earn wages: in the past, "by production", now "by market"

Sun Haolong, the squad leader of No. 12 mill of Taigang Stainless Cold Rolling Mill, increased his salary in March by 10% compared with the previous months. “In March, I made a lot of thin gauge products. The thinner the more difficult, but the higher the market price, the greater the contribution to the company. My income is closely linked to the market, and the income will naturally be high,” he said. .

Weifang, a technical section of Taigang Stainless Cold Rolling Mill, said: “In the past, employees were not willing to do the production. Now we have established a comprehensive performance appraisal system to closely link the market value with the income of the employees. In this way, everyone with a difficult variety is willing to do it, and they must do everything possible."

Unlike Sun Haolong's elatedness, Wang Jiafu, marketing manager of Taigang's marketing department, is somewhat depressed. The amount of steel he is responsible for selling is much higher than the same period last year, but the income is not rising.

“We carried out marketing performance reforms. Although the sales of salesmen increased from the previous year, the market share of the products he was responsible for declined, indicating that other competitors seized our market share. Market share was seized. This means that the company's competitiveness in this steel grade is declining, so his salary will also decrease," said Wang Jianyu, manager of the large customer service department of Taigang's marketing department.

The rise and fall of the wages of front-line employees reflects the effectiveness of Taigang's performance in performance appraisal. The relevant person in charge of TISCO said that the existing performance appraisal will introduce the changing market into the production site, and fully integrate the employee income with the market. This reform directly allows workers to stand at the forefront of the market and let employees focus on the market. How much does it cost to make a ton of steel, what kind of steel is the most profitable, and the staff has a book in mind. It has fundamentally changed the situation of doing more and less, doing well, doing bad work, and doing the same.

Some departments of Taigang have also deepened the reform of the employment mechanism, highlighting the performance of employees, weakening the static indicators of qualifications and academic qualifications, and taking the dynamic indicators of employees' performance around the company's mission budget as the basis for evaluation, and promoting the cadres to be able to go up and down, to further deepen State-owned enterprise reform provides a solid talent guarantee.

From "passive marketing" to "leading demand": marketing system reform triggers a chain reaction

The Hong Kong-Zhuhai-Macau Bridge connecting Hong Kong, Zhuhai and Macau will soon be completed and opened to traffic. This cross-sea bridge project, which has the longest mileage and the most difficult construction in the world, uses more than 8,400 tons of stainless steel produced by TISCO. This is the first time that duplex stainless steel bar replaces traditional steel in the domestic bridge construction. It not only greatly prolongs the service life of the bridge, but also effectively promotes the upgrading of China's cross-sea bridge construction materials.

“This is also a successful experience for Taigang to change its marketing system and take the initiative to lead users' needs,” said Cao Yu, head of the product development department of Taigang's marketing department.

Chai Zhiyong, deputy general manager of TISCO, said that in recent years, TISCO's marketing system has been focusing on import data and products, seeking to replace the opportunity of import, while tracking major domestic projects and proactively discovering domestic demand. Before 2012, Taigang followed the Hong Kong section of the Hong Kong-Zhuhai-Macao Bridge to propose the use of stainless steel rebar and supplied by foreign companies. Therefore, the Taigang marketing team found the owners of the Hong Kong-Zhuhai-Macao Bridge and recommended stainless steel reinforcement to them.

"In the domestic construction market, there is basically no enterprise using stainless steel threaded steel bars, and domestic steel enterprises will not produce them. We have been giving the owners all the relevant technical knowledge of stainless steel, and directly provide users with thread and connecting sleeves in the production process. Finished stainless steel threaded steel bars, such as wire-bonded parts, do not sell only single products such as straight bars and wire rods as before." Cao Yu said.

After unremitting efforts, at the end of 2012, TISCO won the bid for the engineering steel in the inner section of the Hong Kong-Zhuhai-Macao Bridge. Driven by the demonstration of this project, Taigang stainless steel rebar has won the bids in projects such as Brunei Dambullah Bridge and Wuhan Qingshan Bridge.

“Taigang used to be a wholesaler that only sells products, and now it is a retailer, and it is a retailer that meets the individual needs of users through 'products + services.' It seems that it is only a change in supply methods, actually involving internal R&D, Reengineering and institutional changes in design, production, marketing, etc.," said Chai Zhiyong.

In order to meet the market demand, Taigang reformed its marketing operation system and established a “double manager” mechanism. The marketing staff and the technical staff form a partnership, and they are responsible for the order placed by the customer, thus changing the situation that the salesperson is not proficient in the process technology and product performance, and the technician does not understand the customer's demand, thereby further improving the production efficiency.

By deepening the reform of the service-oriented marketing system, TISCO will tilt its marketing services to users, transform it into end products and extension products, and work hard to tap potential demand, create new demands, and lead consumption upgrades. Driven by this, in the past two years, the pace of optimization and upgrading of Taigang's product structure has accelerated, and the development of high-tech products has been further accelerated, and the product and market and users have a higher degree of fit. Statistics show that in 2016 alone, TISCO has launched more than 10 new products that break foreign monopoly. The market contribution rate of Taigang's new products is over 70%. In the first quarter of this year, new product development increased by 8.6% year-on-year.

Optimize industry and capital structure: inject new momentum into transformation and upgrading

On May 26, Taigang Group signed an equity investment cooperation agreement with China Life's equity investment company. According to the agreement, China Life Insurance will invest in Taigang Medical Co., Ltd., making it a diversified medical company jointly owned by two state-owned enterprises, Taigang Group and China Life Insurance. "This cooperation has further improved the institutional mechanism and realized the diversification of equity in TISCO Medical Corporation, which is in full compliance with the spirit of state-owned enterprise reform." Gao Xiangming, general manager of Taigang.

Prior to this, TISCO integrated internal medical resources, formed Taigang Medical (Group) Co., Ltd., and began a corporatization operation. In the next step, the Taiyuan General Hospital and the Burning and Plastic Surgery Center will be transformed to promote the reform of the core backbone employees.

For a period of time, Taigang Group has successively launched a series of major reform measures with the optimization of industry and capital structure as the entry point and breakthrough point. On April 25, TISCO Stainless signed a tripartite strategic cooperation agreement with Shanghai Sensong Pressure Vessel Company and Shanghai Junyi Trading Co., Ltd. to jointly promote the manufacture, installation and research of pressure vessels, heat exchangers and other equipment in the chemical, pharmaceutical and food industries. Development. On May 18, Taigang Stainless signed a strategic cooperation agreement with Zhongji Yongji Motor. The two sides jointly built a technical joint studio to achieve a win-win situation in technical support and service in the field of electrical steel.

In the past two years, in the face of overcapacity in the steel industry, in the process of restructuring and transformation, TISCO has also played a role in the allocation of financial resources from a strategic perspective, setting up finance companies, investment companies, financial leasing companies, and businesses. Factoring and other companies, vigorously promote the integration of industry and finance. These financial sectors have played a significant role in revitalizing stocks, financing funds, accelerating circulation, and improving revenues. They have provided effective financial support for Taigang to promote supply-side reforms, transformation and upgrading, and quality improvement. At present, TISCO's asset-liability ratio is less than 70%, and it is at a low level in industries such as steel and coal.

On June 5, Industrial and Commercial Bank of China injected RMB 4 billion of the first phase of the Taigang Group's capital increase and share into the Taigang Group account. The relevant person in charge of Taigang said that this market-oriented debt-to-equity swap project can further alleviate Taigang's debt, introduce social capital and private capital into state-owned enterprises, and realize the diversification of state-owned enterprise capital, which is conducive to enterprises to change their operating mechanism and promote enterprise continuity. Profitable and stable economic growth.

Li Xiaobo, chairman of TISCO, said that a series of major reforms have injected new momentum into Taigang's transformation, upgrading, quality and efficiency, and the company's vitality has been significantly enhanced. In 2016, when steel production was basically flat, TISCO achieved a profit of 1.29 billion yuan. Compared with the same period of last year, in the first five months of this year, Taigang's operating income increased by 16.53%, the profit was 469 million yuan, the tax increase was 12.51%, and the total import and export volume increased by 45.46%.

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