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Clean Steel • Organic Growth

Seizing the commanding heights of the market through multi-position management

By:admin Published:2016/12/28 21:02:03

Reporter: Chen Liming Correspondent: Wang Jiankai, Yuan Yan

Changshu Longteng Special Steel Company (hereinafter referred to as Longteng Special Steel) adheres to technology-led development and independent innovation and implements the development strategy of “professionalism, excellence, specialism and innovation”. Through speeding up the optimization of products, equipment and market structures, it has become China's largest production base of shipbuilding sections (with an annual capacity of 3.2 million tons), rolling steel ball blanks, and PC bars for pre-stressed concrete. It is also listed among the “Top 500 Chinese private enterprises”, “Top 500 private enterprises of Jiangsu Province”, “Top 100 innovative enterprises of Jiangsu Province”, “innovative enterprises of Jiangsu Province”, “High-tech enterprises of Jiangsu Province”, and “major contributors of tax” in Changshu city.

In recent years, as the macro economy slows down and becomes a new normal, the production and operation of iron and steel industry encounter more difficulties. The intensified market competition has brought enterprises into the era of low profit or even loss. Against such a background, Longteng Special Steel has given full play to its own unique advantages and maintained sound production development and stable operation. In 2014, for the company's core business of steel sales, the sales revenue reached 11.7 billion yuan and its products earn more than $300 million foreign exchange through exports; In 2015, the company's sales revenue registered 13 billion yuan, up 12.9% from a year earlier and achieved a total profit and tax of 420 million yuan, of which 210 million yuan is the profit. Products exported have earned a foreign exchange of 2.06 billion yuan.

In 2015, the company posted the sales revenue of 12.6 billion yuan and achieved profit and tax of 420 million yuan with a profit of 210 million yuan. Its exports amounted up to 2.06 billion yuan. In the recently-released two lists of industrial enterprises and top 100 private enterprises with a revenue exceeding ten billion yuan in Jiangsu Province, Longteng Special Steel continues to take a place.

Recently, the Secretariat of Suzhou Metallurgy Industry Association accompanied by reporters with China Metallurgical News came to Longteng Special Steel for a field survey on the success of the company's innovative development over the past two decades. 

Scientific decision makes magnificent turn

Changshu Longteng Special Factory, founded in 1993, is the predecessor of Longteng Special Steel. It is located in the coastal area of Meili Township industrial development zone in the eastern suburbs of Changshu. Adjacent to Shanghai-Nanjing Expressway, it has Shanghai on the east, Suzhou on the south, Wuxi on the west and the golden waterway Yangtze river to the north. All of these have offered an advantageous geographical position.

As Longteng Special Steel Factory was initially founded, its staple goods were deformed steel. As general products, they had no competitive edge over other products of the same kind manufactured by large steel plants. So, the Factory struggling for survival was restricted seriously and only managed to reach an annual output value of 100 million yuan in 2000.

After the Longteng Special Steel Factory was transformed into joint-stock private enterprise in 2001, Ji Bingyuan, Chairman of the Board and General Manager, seized up the situation and made resolute decisions to adjust the development strategy. He analyzed that, at present, the "four sames", namely selling in the same region with the same equipment, technology and competitiveness, go viral within China's steel and iron industry, leading to endless price wars. Disordered competition will do no good but result in suffering of all.

Thinking of this, Ji looked far ahead. He made innovation about his development concepts for the enterprise and decided to blaze a different trail by rejecting homogeneity competition in normal products such as deformed steel and wire manufactured by large steel factories around the Factory including those in Zhangjiagang, Suzhou, Jiangyin, and Nanjing. He also decided to unswervingly uphold technological innovation, complement a “multi-position management” development strategy and pursue a development path of “professionalism, excellence, specialism and innovation”. 

Since the 13th Five-Year Plan period, Longteng Special Steel Factory, under the leadership of Ji Bingyuan, aims at the market demands boosted by the prospering development of shipbuilding industry at home and abroad, upgrading of engineering industry and the burgeoning mining exploitation. It targets at the rare special steel featuring small quantities, multiple specifications and sophisticated technology that was excluded by large steel enterprises and beyond general ones. By establishing high-level research and development platforms characterized by "integration of industry, study and research" with renowned institutions for higher learning like Tsinghua University and Zhejiang University, Longteng has pooled professional technological talents to specialize in developing and manufacturing high-tech, high value-added and high craftsmanship products with a great varieties of structures like special shipbuilding sections, hot-rolling and hot-forging steel balls for the bearing industry and nonferrous mineral processing, and has formed a first-move advantage to break into high-end national and international markets.

During the development course of Longteng Special Steel, Ji Bingyuan, as an excellent private entrepreneur in the new era, values the macro policies of the Central Government and the provincial government very much and pays high attention to the statistics of steel and iron industry as well as of local economic development. Through thorough study on the policies and statistics in the very first place, he always combines them with the enterprise's actual situations, keeps adjusting its development goals with the times and steers its development towards a better place.

In 2000-2008, as Chinese economy accelerated expansion, Longteng Special Steel also expanded its capacity; after the world's financial crisis in 2008, especially in recent years, China's macroeconomic growth has slowed down and become a "new normal". Longteng Special Steel has made new decisions beforehand and adjusted its positioning in a timely manner. By competing with global outstanding steel and iron enterprises, it has established the "five bests" operation philosophy, namely, the best in product quality across the industry, cost-benefit ratio, service, market share, and in cooperation and harmony, continuously expanded its product areas, and collaborated with customers at home and abroad based on a win-win strategy, so as to further enhance its core competitiveness and actively face up to the challenge of the changing market.

Over more than two decades of innovated development, Longteng Special Steel has made a magnificent turn from struggling to leading in the market.
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