Newsletter: Chinese help a Serbian steel factory to regenerate

Release time：Apr 25, 2019 From：admin

Smederevo is located about 60 km southwest of Belgrade, the Serbian capital. In this small town of about 100,000 people, there are nine Chinese people who manage a steel mill that affects the livelihood of one-fifth of the local population.

From the annual subsidy of hundreds of millions of dollars to the annual income of more than 1 billion US dollars, for the rebirth of the Smederevo Steel Plant, Song Ganghai, executive director of Hegang Serbian Co., Ltd., was deeply touched by an interview with Xinhua News Agency.

Founded in 1913, the Smeder Revo Steel Plant was once the only state-owned steel plant in Serbia and was hailed as “the pride of Serbia”. However, due to fierce competition in the international market and poor management, the steel mill was once in trouble and was on the verge of bankruptcy. The Serbian government had to subsidize 10 million US dollars per month to barely maintain its operations.

In the first half of 2016, China Hebei Iron and Steel Group acquired the steel plant for 46 million euros and established Hegang Serbia Co., Ltd. After the acquisition, the steel mill reversed the loss for seven consecutive years. In 2018, the steel plant produced 1.77 million tons of steel per year, setting a record of 105 years since its establishment. In the same year, it achieved a revenue of 1.05 billion US dollars. It became the first foreign exchange earner in Serbia and the Smeder Revo steel plant was reborn.

According to Song Yihai, in order to get the steel plant out of the predicament, China has made a lot of efforts after acquiring the steel plant.

After the completion of the acquisition, Hegang Group dispatched 11 batches of nearly 200 technical teams to Serbia to help the steel plant find and solve problems from the aspects of production organization, financial management, process control, quality assurance, equipment maintenance, etc. The program and the formation of a syndicate provide low-cost project financing.

Due to poor sales, the Smeder Revo steel plant has not been fully loaded for many years, and only one of the two ironmaking blast furnaces has been put into production. In order to fully release production capacity and improve production efficiency, and also to test the problems of production equipment and exposed equipment, the management team of the steel plant was decided to start two iron-making blast furnaces at the same time to implement full-load production.

Running two blast furnaces at the same time not only means higher costs, but also faces great risks. If the raw materials are not available in time, the production of the two blast furnaces will be difficult to sustain; if the products are not well sold, the product backlog will not only affect the efficiency and reputation of the company, but also the enthusiasm of the employees.

With the active efforts of the Chinese side, Hegang Group took advantage of its upstream and downstream channels to significantly reduce the cost of raw material procurement and successfully sold the finished products to all parts of Europe. In just a few months after the completion of the acquisition, the steel mill realized profitability.

In Song Yihai's view, another reason for the success of Hegang Serbian Co., Ltd. is that China uses a large number of locals. After the acquisition of the Smeder Revo Steel Plant, the original 5,000 local employees were all retained. Hegang Group dispatched only 9 Chinese resident managers and gave Hegang Serbian Co., Ltd. great autonomy. The Hegang Group’s practice of not laying off employees not only won the loyalty of local employees, but also was fully affirmed by the Serbian government.

The State Secretary of the Serbian Ministry of Economic Affairs, Dragan Stevanovic, said that 5,000 workers mean 5,000 families, plus the entire supply chain of the steel plant. It is estimated that about 20,000 people in Smederevo will rely directly or indirectly on the river. Steel Serbia Co., Ltd. survives.

In order to improve the skills of employees and enhance the company's competitiveness in the international market, Hegang Serbian Co., Ltd. also provides various training opportunities for local employees. According to Wang Lianxi, deputy general manager of the company, the company regularly organizes training in safety, economics and law. The business management team and production technology backbone of the Serbian side are also invited to exchange and training in China.

The Mayor of Smederevo, Jasmine Avramovic, said that Hegang Serbian Co., Ltd. has brought stable income to the families of 5,000 employees, which has led to the consumption of local people, and the economy of the whole city is flourishing. development of. The increased fiscal revenue can be used to build roads and invest in medical education, which are the benefits of Hegang.