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Bayi steels itself during the economic downturn

By Xiao Wang (China Daily)
Updated: 2009-05-14 07:37

Outside molten iron is pouring down from a huge blast furnace, but inside Ablikm Yasen, a smelting expert from the Xinjiang Bayi Iron and Steel Co Ltd, sits comfortably in a hi-tech control room and studies the computer screen in front of him.

"This is what automation brings to the steel workers," said the 39-year-old engineer, a graduate with a doctorate funded by the company.

This automation not only provides a comfortable working environment for the plant's staff, but also helps company financially during the current economic downturn.

Following a 300 billion yuan investment plan of the local government, aimed at boosting local demand, the steel company is now working at maximum capacity. According to Apizi Niyazi, deputy secretary of the company's party committee, the plant is on course to produce more than 5.5 million tons of steel this year.

Bayi's management is now closely tracking Xinjiang's 300-billion-yuan investment plan to boost local demand. It has also signed agreements to supply steel products for a renovation project in Kashgar city's old downtown, a greenhouse project in Turpan, and several oil and railway projects.

In the first quarter this year, the company produced 1.1 million tons of iron, 1.13 million tons of steel, and 1.06 million tons of rolled steel. It also sold 992,100 tons of steel - of which 70 percent was sold to local companies. The output matches that of the same period last year.

Despite this, due to the increase in raw material costs and the drop in steel prices, profits have dropped dramatically. In light of this, according to Niyazi, a series of measures have been taken this year to cut down costs.

The company has now introduced 13 cost-saving initiatives, aimed at saving a total of 10 million yuan. The administration fee this year will also be 200 million yuan lower than last year.

Niyazi said: "All these measures guarantee that our normal operation will continue and also provide a solid financial support for our future research and development.

"In order to meet the market's needs, the company has diversified its products away from simply construction steel to boards since 2007. This has become another key means for us to combat the financial crisis as steel board output represented one third of our total output last year."

According to Niyazi, the plant's capacity for steel production is expected to reach 10 million tons in 2012, making it the most competitive steel company in both west China and central Asia.

Bayi Iron and Steel Co Ltd now employs 23,719 workers from 25 nationalities, nearly one fifth of who are from ethnic minorities. Their annual average income is about 40,000 yuan.

Most employees seem satisfied with their life. Abusuwake Abulimiti, a 36-year-old furnace worker said: "It's a very comfortable working environment and a friendly place to work."

Baosteel Group, China's top steel maker based in Shanghai, acquired Bayi Iron and Steel Co Ltd in January 2007.

(China Daily 05/14/2009 page3)