A.General information

History evolution

Having been approved by Gansu provincial government, Jiuquan Iron & Steel (Group) Co., Ltd. (JISCO) initiated the JISCO Hongxing Iron & Steel Co., together with Lanzhou Railway Bureau, Gansu Provincial Power Co., Jinchuan Non-ferro Co. and North-west Yongxin Chemical Co. in April, 1999. 

Upon the approval by (2000) 157 document issued by China Securities Supervision Administration Committee, the company issued RMB 200,000,000 Yuan common shares (A share) with 5.5yuan for each share to the public on Nov. 30th, 2000.

Upon the approval by (2000) 109 document issued by Shanghai Stock Exchange, 200,000,000 common shares issued to the public were allowed to be transacted in Shanghai Stock Exchange since Dec. 20th, 2000. (Share code: 600307)

On April 5, 2006, conference of non-tradable shares reform & general meeting of A share fund shareholders was held. The proposal of the shareholder structure of HongXing Stock was passed by the approval of 77.21% of tradable shareholders and 96.96% of the shareholders in attendance. Shareholders of non-tradable shares would make payment according to a proportion of  10：3.2. Thus, the reform  of the shareholder structure of HongXing Stock was accomplished and the whole shares of HongXing Stock are tradable.

B.Equipped capacity

The company is equipped with a number of advanced production facility in iron-making, steel-making, high-speed wire/rod and plate. The main equipments are: one 1800m3 blast furnaces and one 1000m3 blast furnaces; three 120t and three 50t oxygen top and bottom blowing converters; three 4-strands continuous billet casting machines; two R7.5m single strand arc type slab casting machines; 2 sets of hot metal de-sulfurizing system; 1 LF furnace and 1 CAS-OB furnace. 

2 sets of high-speed wire/rod mill:

The maximum speed of the first one, put into operation in 1988, is 117m/s. The mill was imported from MDS Company in Germany and main electrical and automation equipment was imported from ASEA Company in Sweden. All 27 mills are controlled by computer for continuous rolling. The line was revamped to high-speed wire and bar production line with annual capacity 600,000t in 2002. Another set of mill was put into production in Nov. 2002. It adopts up-to-date technology imported from America Morgan Company. There are 30 mills and the AC speed adjusting system installed to ensure product tolerance maintained within 0.1mm. The finishing rolling speed is 112m/s and the advanced cooling control technology enables production of value-added steel grades. The line may combine with steel making process so hot charging and energy saving is possible; its annual capacity is 500,000t.  

The main equipments, especially those key equipments and automation system, of plate mill plant are imported from 11 countries, such as American, England, France, Germany, etc. The instrumentation control system and combustion control system of reheating furnace were imported from Spain. The max rolling force of single stand 4-high reversing mill is 5500t and level 1 and level 2 automatic control systems is adopted. On line accelerated cooling system after rolling was imported from France. Thermal mechanical property rolling technology can be achieved using AGC and PLATE Model together. Such internationally advanced equipment can produce 750,000t per year.

A new iron and steel project, which was put into production in 2006, contributes an additonal productive capability of 1.8 million tons of pig iron, 2 million tons of liquid steel and 2 million tons of billet for medium thickness and heavy plate. Furthermore, Yicheng Steel, a holding company of HongXing Stock, can produce 1 million tons of steel per year. Up to now, Hongxing Stock has a productive capability of 5 million tons of pig iron, 6 million tons of crude steel, and 3 million tons of rolled steel products.

C.Product market

The company produces and sells the steel and iron products. The final products are wire, rod, plate and casting slab. The main products cover all kinds of pig iron for steel-making or forging and more than 30 kinds of steel grades including plain carbon steel, high carbon steel, welding rod steel, bridge steel, pipe steel etc., all kinds of casting slab and billet, plain wire steel with diameter between 1.5 to 14mm, various types of high-speed bar steel, 6 to 40mm thickness plate including boiler plate, Q3445B low alloy structure plate, 16MnR vessel plate, B class ship plate, X60 pipe plate, No. 45 structure plate, etc. The products all reach the state’s and the industry’s standards. For this certificates were issued by China Metallurgical Industry Quality System Authentication Center. The quality of nine products such as low carbon non-twist cold-controlled hot-rolled wire steel achieved the internationally advanced standard. The series of wire product was awarded the honorable name of “best product of Gansu”. The common wire product, hot rolled ribbed bar and 20g boilerplate were awarded the “golden cup” by National Metallurgical Bureau. The ER70S-6CO welding high-speed wire coil was honored “new national key product” by the national ministry of science and technology. The ship plate has already got the trade certificates from China, Germany, England, Norway, etc. The good quality and perfect after-sale service has already attracted the customers and markets. The products have been sold to more than 28 provinces and areas in China, and foreign countries such as Korea, Japan, American, etc.

D.Assets and achievements

By the end of , 2006, the total assets of the company is RMB 7,727,680,000 Yuan in which the original fixed assets value is RMB 7,604,170,000 Yuan and the net fixed assets value is RMB 4,336,170,000 Yuan. The net assets are RMB 4,156,860,000 Yuan and assets-liability ratio is 46.2%.

In 2006, totally 4.28. million tons of iron, 5 million tons of steel and 3.34 million tons of processed products were produced. In the same period, the main revenue was RMB 13.47 billon Yuan , main profits is RMB 1.34 billion Yuan and the net profit was RMB 450 million Yuan.

E.The Predominance of the company

The company appears to be the one of most powerful, best equipped and highest profitable in northwest of China. Abundant resource, enough supply of energy and the utility media such as power, oxygen and steam sets up reliable pre-conditions for the company. All reasonable configurations of processes, excellent consumption index, skillful operator and famous rolling experts, easy transportation and widespread sales network provide the company the advantages for sustainable development.

JISCO Hongxing Company finishes a series of reform, innovation and restructure since the initiating stage up to the official registration, strictly following the legal procedures. At present, a flexibly changeable system regarding with the employees’ posts and remuneration has been set down. In detail, such a system results in that, job assignment by competition, technical innovation by tackling key problem on our own, target cost control by potential realization, material purchase by open bidding, market exploitation with fast response,  legal person management with explicit property right ownership, human-based worthiness orientation. As being of suitable size, producing the high value-added and aiming at loftily leaping and high benefits, the company finally becomes a big profitable enterprise in Gansu province, national 1-class metering organization and national excellent enterprise in quality control.

Though the inshore and offshore market competition being inclined to be more severe, the company is ready to take more effective countermeasures, make use of all positive possibilities, make full play of the teamwork spirit and the equipment capacity, adjust the products mix to a reasonable level, increase the production of high value-added, high technique-contained and high profitable products, consolidate the advantages in area marketing, stably raise the economic benefits. The company will also keep ahead toward new, excellent and cost-effective activities; attribute the entire struggling endeavor to lift up its core competitiveness. Hopefully, JISCO Hongxing will develop in an unusually fast way till being a first-class listed company in northwest of China.