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What did Li Keqiang Say in WISCO?

Edited by: Zhang Jiuping   Source:  China Metallurgical News- csteelnews.com

  

Li Keqiang said that WISCO made contribution to the country in history. He believed that the difficulties facing it were temporary and it would go through them. He also instructed the State-owned Assets Supervision and Administration Commission of the State Council and Hubei Provincial Government to give the group strong support.   

He pointed out that the fundamental solution for state-owned enterprises was reform. With great expectation on WISCO, he encouraged it to innovate, perfect its expertise and nurture core competitiveness.

China Metallurgical News and csteelnews.com

Reported by SUN Jin and GENG Jia

On the afternoon of May 23, Li Keqiang, member of the Politburo of the Communist Party of China and premier of State Council inspected Wuhan Iron & Steel (Group) Corp. During the inspection, he conducted field survey in the No.2 Steel Work of WISCO Plant and the No.4 Silicon Steel Work of Silicon Steel Sector, communicated with cadres and employees of the Group during a symposium and listened to the report by Ma Guoqiang, chairman and party secretary, about the Group’s progress in quality and efficiency improvement and treatment of excessive capacity. Premier Li gave credit to the performance of the Group in reform and development and affirmed that the fundamental solution for state-owned enterprises was reform. He encouraged the Group to innovate, perfect its expertise and nurture core competitiveness. He also instructed the State-owned Assets Supervision and Administration Commission of the State Council and Hubei Provincial Government to give it more support in its surplus capacity disposal and troubleshooting so as to set it as an example of surplus capacity disposal.        

 “Hardships are temporary and conquerable.”

 

Li Keqiang examining the closed furnace at the No.3 furnace of the No.2 Steel Work of Wuhan Iron & Steel Plant

At 16:50, Premier Li first arrived at the No.3 converter of the No.2 Steel Work of the Plant. With the implementation of the steel de-capacity policy, this converter, which made remarkable contribution to the Group’s development in the late 1970s, was shut down by the end of 2015. Over more than 10 years, WISCO has voluntarily eliminated outdated capacity of nearly 5 million tons. This year, since it has disposed its outdated capacity, it plans to eliminate steel capacity of 4.42 million tons and iron capacity of 3.19 million tons and to help around 10,000 surplus employees with resettlement.

On the coil base of the No.3 converter, Premier Li squatted to carefully examine the closed converter and listened to the reports on the operation of the entire plant one by one. He encouraged the principal of the No.2 Steel Work to promote the plant’s development through excessive capacity disposal, tap power from innovation and develop new products. He also added that WISCO shouldered heavy burden but “Hardships are temporary and conquerable.”  

Thereafter, Premier Li inspected the No.4 Silicon Steel Work of Silicon Steel Sector of the Group. Silicon steel is called the “handicraft” among steels. The high-grade oriented silicon steel which is manufactured here for large transformers and other high-end equipment is renowned as “The Pearl on the Crown”.  

 

In the operation room of the No.7 circular furnace of Silicon Steel Sector of WISCO, Premier Li showed gratitude to employees, “Owing to independent innovation, imported silicon steel has been substituted by domestic silicon steel in the key intermediate links. You have done a good job! Thank you!”

 

Wang Haichun, the foreman on duty of the No.7 circular furnace, introduced to Premier Li the software developed by WISCO and the Group’s effort in increasing product stability. Apparently, Premier Li, who was being in his third inspection on the Group, was quite familiar with the low-temperature high magnetic strength oriented silicon steel, one of the plant’s products, and called it the “hit product” of the Group and “China’s competitiveness”. He professionally consulted the differences between it and similar products of developed countries in terms of technical parameters.    

Premier Li said that the current insufficient supply in China’s high-end steel market still had to be complemented by imported high-end steel. For example, the development of ultra-high voltage needs a large amount of silicon steel. He required WISCO to accelerate R&D development and quality management as well as increase stability. He spoke highly of the Group’s achievement in depending on independent innovation to build national silicon steel laboratory and production base.

 “We support you and you should dare to try.”

 

Li Keqiang inspecting the production and operation of the No.2 Steel Work of WISCO Plant

 

At last, Premier Li arrived at the computer building in the front of the Group and communicated with the representatives of cadres and employees of the Group during a symposium in a roughly decorated meeting room.

Premier Li asked a straightforward question, “What difficulties do you have? What do you need from the country?”

Ma Guoqiang briefly introduced the Group’s progress in de-capacity, especially the resettlement of surplus employees and debt treatment.

Premier Li said that WISCO made significant contribution to the country in history and produced the first batch of silicon steel in China. Its employees should be acknowledged with their contribution to China’s industrialization. However, in reality, the capacity of steel industry is excessive. Speaking of transport radius, WISCO produces general products like crude steel and is less competitive than its peers in the coastal area. Therefore, it must be resolute and courageous enough to dispose surplus capacity.  

As for the effective resettlement of surplus employees, Premier Li said to the principal of State-owned Assets Supervision and Administration Commission of the State Council during the inspection that WISCO should be concerned as a key to steel de-capacity. Then he stressed that excessive capacity disposal should ensure that surplus employees were transferred to new posts rather than laid off and employed in other industries rather than unemployed. He added that all employees really in need should be provided with the minimum social security.    

Regarding debt issue, Premier Li gave solutions on site. He demanded National Development and Reform Commission to send personnel to WISCO to have a specific research and find a way to lower leverage through discussion so as to relieve debt and lower the Group’s financial cost.  

Premier Li decided to make the Group an experimental enterprise of steel de-capacity immediately after listening to the report during the symposium. He explained that being an experimental enterprise was politically favorable but the enterprise should work more assiduously to downsize and improve quality and efficiency. Before the inspection, the central government had allocated RMB 100 billion to subsidize de-capacity, especially subsequent employee resettlement. “We support you but you should dare to try,” said the premier.     
Premier Li affirmed that the fundamental solution for state-owned enterprise was reform and system must be changed. Nowadays, many state-owned enterprises are obsessed with participation and, as the result, have so many levels that the principals might be confused. Most of the levels are irrelevant to their expertise and have impacted the development of expertise. For the purpose of downsizing, it is essential to be free from sideline business and perfect expertise with innovative development and the innovations on system and mechanism.   

Premier Li Keqiang specified that the capacity in China’s steel industry was excessive while the product quality was not high and a large amount of imported high-end steel was still needed. “WISCO is a national force and must innovate. You have the capability to innovate because you’ve used it for silicon steel. So how is it possible that you cannot innovate on other products? You should release more products to replace important products,” said he.

In the end, Premier Li emphasized that homogeneous competition was not advisable for the general capacity control of enterprises, especially central enterprises. It is not necessary for central enterprises to compete with private enterprises over market share in the field unrelated to national competitiveness. WISCO should do what others couldn’t do to perfect its expertise and gain core competitiveness.  

 

Liu Zili, a technician of steel work of the Group, said during the symposium that premier acknowledged the Group’s performance and expressed his expectation, and innovative development was the key.

 

In the No.2 Steel Work of WISCO Plant, Premier Li said, “The difficulties in the way are temporary. I believe WISCO can conquer them.”

 


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