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Shougang to axe 21% of workers

By Gong Zhengzheng (China Daily)
Updated: 2007-03-29 08:51

Shougang Corp, China's ninth-biggest steel mill, plans to cut its workforce by 21 percent by the end of this decade as it moves production out ofBeijing.

The group, owned by the Beijing municipal government, will reduce the number of its employees to 65,000 by 2010 from 82,500 last year, Shougang Chairman Zhu Jimin told China Daily.

In the meantime, the firm's workforce in the city its current home base will be axed to 30,000 from more than 50,000, Zhu said.

However, Shougang aims to double its workers' salaries by 2010 from 2005, he said.

Last year, its employees' average income stood at 37,000 yuan, up 8.4 percent from 2005.

Following a central government order, the group plans to halt all crude steel production in Beijing as part of efforts to ease pollution. Formed in 1919, Shougang is one of the city's biggest polluters.

Earlier this month, it started building a new 9.7-million-ton plant in neighboringHebeiProvince with Tangshan Iron & Steel Corp, China's No 3 steelmaker. The total cost of the new factory is estimated at 66.8 billion yuan.

But the group will keep its headquarters in Beijing as well as its non-steel businesses such as machinery and electronics, real estate and other service sectors.

Related readings:  Shougang begins construction of new plant outside capital  Shougang to reduce production in 2008  China approves giant steel project Shougang to shuffle assets in listing move

Liu Shuiyang, Shougang's vice-president, said there would be 7.5 square kilometers of spare land in the Shijingshan District on the western outskirts of Beijing when it moves its steelmaking facilities, which could help the firm raise more than 20 billion yuan.

The money would be used for payout to its redundant workers and build the new plant in Hebei, Liu said.

A top official from Shijingshan District said the local government and Shougang would jointly set up a service center to help laid-off workers find new jobs.

The company's plan to cut jobs is also seen as a streamlining measure taken by many of China's State-owned industrial groups to improve productivity.

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