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Man of steel

By LIU WEILING and DIAO YING (China Daily)
Updated: 2007-08-14 17:10

Some critics around the world have alleged that the steel industry in China has an unfair advantage because of government subsidies.

Yet Shen Wenrong, president of China's largest private steel maker Jiangsu Shagang Group, says he is a bit jealous of Mittal, the Indian steel giant, because it has a better business environment.

"If the financing conditions in China were half as good as that for Mittal (Lakshmi Mittal, CEO of Arcelor Mittal, the largest steel producer in the world), I could reach a capacity of 100 million tons of steel made solely in China," Shen says while sitting in a factory office overlooking the wide, languid Yangtze River.

"He was not as good as me 10 years ago."

With a capacity of 14.6 million metric tons of crude steel, Shagang Group is listed as the 16th-largest steel maker in the world by the International Iron and Steel Institute. Company sales reached 55 billion yuan in 2006.

Unlike Mittal, whose business blossomed with the backing of international investment banks and capital, Shagang grew from a 450,000 yuan village factory to one of the biggest steel makers in China largely through the industriousness and efficiency of its president and his fellow workers.

A big purchase

Shen first drew the industry's attention in 2001 when Shagang acquired the Dortmund-Horde steel mill from German industrial giant Thyssen Krupp for 30 million euros and began plans to ship its equipment back to China.

People were interested why the decision to buy the mill was reached only a month after it was offered for sale. Some wondered whether there were secret agreements, while others guessed that like many outbound investments the deal was supported by the Chinese government.

One thing Krupp's workers knew for sure is that when the Chinese arrived to prepare factory equipment for shipment, they worked hard.

As the Germans demonstrated in favor of a 35-hour work week, 1,000 workers from Shagang, an obscure steel maker from far-away China, began working over 12 hours a day with no weekends off. When German authorities cautioned Shagang to obey local labor laws, the Chinese began to take a day off each week - and worked in their dormitories.

Related readings:

 Investors need steel nerves or brass necks

 Shagang Group purchases German plant from Thyssen Krupp Stahl AG

The 250,000 tons of equipment and 40 tons of reassembly documents from the steel mill were finally moved to Jinfeng, a town along the Yangtze River, after a trip of 5,600 miles, arriving a year ahead of Shagang's schedule and two years earlier than German estimates.

That kind of effort, perhaps impressive to Europeans, is nothing new for workers at Shagang. Even now, Shen's 70-square-meter apartment is at the factory to save commuting time. His wife says he still often arrives at home after 11 pm.


(For more biz stories, please visit Industry Updates)

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