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What is Shagang’s strategy behind its takeover of China’s largest special steel maker?      [2018-01-16]

Northeast (or Dongbei) Special Steel realized a turnaround into black in the first month after reorganized by Shagang Group in 2017, marking the initial success of private steel mill’s takeover of large-scale state-owned steel enterprise in China.

 

Nucor has granted Shagang license to establish an ultra-thin strip production line in China in addition to its North American base. Shagang is the first mill in China to boast this product line with the exclusive rights of technology and sales. The mill is said to produce 0.7mm-1.9mm Castrip in place of the conventional production route.

 

Shagang will take great efforts in the R&D of robot project, striving to achieve the goal of replacing manpower with 1000- 1500 robots by the end of 2020.

 

It also intends to raise the proportion of special steel in its product portfolio from 30%-35% to 50% through five years of hard work while achieving increases both in quality and quantity of high-end automotive, home appliances and other applications.

 

In last 20 years, Shagang became China’s biggest private steel maker supported by its commodity grade steel supply. But it may, in the next 20 years, reply on special steel whose market share is only 12% as per CLIK’s research, compared with that of 30-40% in mature markets. Shagang’s strategy might be to drive the momentum from commodity to special in parallel with the country’s strategy of quantity to quality.

 

Northeast Special Steel will focus on product development for quality improvement, becoming a premium provider of quality steel for manufacturing enterprises in China. In Northeast Special Steel Group, Fushun Special Steel will be producing more steel products in urgent need for manufacturing as import substitutes; Dalian Special Steel will enhance the quality comprehensively.


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