China Metallurgical News Agency

Reported by reporter Yang Kai

Photographed by reporter Zhu Yaming

The picture shows Xiong Xiaoming accepting an exclusive interview with a reporter from China Metallurgical News

"In the first half of this year, thanks to the implementation of refined management and accelerated development of new varieties, Liugang's operating conditions are the same as those in the steel industry, and both show a positive trend." During the 11th Council (Expanded) Meeting of the Sixth China Iron and Steel Industry Association, Xiong Xiaoming, general manager of Liugang Co., Ltd., said in an exclusive interview with a reporter from China Metallurgical News: "With the gradual implementation of measures such as "anti-internal volume" that help the development of the industry, the steel industry and enterprises are expected to go more steadily and further on the road of high-quality development."

Take multiple measures to help Liugang grow against the trend

During the period of in-depth adjustment of the steel industry, Liugang delivered a brilliant report card in the first half of the year: Liugang’s semi-annual performance forecast showed that the net profit attributable to the parent company’s owners increased by 530% year-on-year to 641%.

"The achievement of such achievements is mainly due to the implementation of refined management and accelerated variety development measures such as Xiong Xiaoming." According to Xiong Xiaoming, in the first half of the year, Liugang focused on controlling internal costs, reducing raw material inventory, and further controlling product inventory, strengthening its grasp of the market. Through the coordination of "production, supply, marketing and transportation", Liugang Co., Ltd.'s net profit in the first quarter surged by nearly 6 times year-on-year, demonstrating its strong cost control capabilities.

Variety development is another highlight of Liugang. "The development and efficiency of varieties are better than the same period last year." Xiong Xiaoming said that in the first half of the year, the development targets of Liugang's key varieties exceeded the completion, and the development progress of the second quarter was more obvious than the growth in the first quarter. By optimizing the production line structure and increasing the proportion of high-gross profit varieties, Liugang has effectively hedged the pressure of insufficient traditional demand.

At the same time, the synergy effect of Liugang dual bases is highlighted, and Fangchenggang base and Liuzhou headquarters form complementary products and market areas, and the market radiation range covers a large number of regions such as East China, Guangdong and Guangxi and Southwest.

In addition, the expansion of the export market has also provided new impetus for Liugang's growth. In the first half of the year, the export volume of enterprises increased significantly. By exploring emerging markets and optimizing product structure, Liugang's influence in the international market has gradually increased.

"Anti-involvement" and control output with caution and optimistic prediction of industry trends

"Although the industry's profits showed signs of improvement in the first half of this year, the foundation was not stable. The meager profits mainly stem from the different fluctuations in the prices of finished steel products and raw materials, thus forming a short-term profit margin, but their sustainability is questionable. In terms of exports, due to the complexity of the international situation, it is difficult to determine whether the growth trend can continue. In addition, steel prices continue to decline at low levels, which directly compressed the industry's profit margin, which restricted the industry's transformation and upgrading. We are still cautiously optimistic about the operating trend of the steel industry in the second half of the year." Xiong Xiaoming said that this judgment is based on expectations for policy dividends. Since the national macroeconomic policy shifted at the end of September last year, including the current "anti-intra-volume" measures, orderly competition in the steel industry is expected to replace low-cost disorderly competition. "At present, industry consensus has been formed. Once the "starting gun" of relevant departments is activated, it is expected to control production more effectively." Xiong Xiaoming said that in terms of "anti-internal circulation" and production control, we hope that the country can introduce more clear policies, and at the same time, corresponding supporting policies for assessment, incentives and punishment are required. Xiong Xiaoming emphasized that the promotion of the policy end is crucial to the long-term development of the steel industry. The meeting of the Central Financial and Economic Commission in July has strengthened the orientation of "governance of low-price disorderly competition", which will create a better environment for the healthy development of the industry.

"Control production has become an industry consensus." Xiong Xiaoming said that Liugang will actively respond to the industry's call, avoid excessive market competition through self-discipline production control, and maintain the healthy development of the industry. In response to the current internal circulation phenomenon in the steel industry, Xiong Xiaoming proposed that at the industry level, it is recommended to establish a "traffic light" mechanism for output assessment to strengthen order negotiations among steel plants; at the enterprise level, it is recommended to stabilize the profit of tonnes of steel by controlling production, while focusing on the development of special varieties in subdivided fields to avoid homogeneous competition.

Actively transform and respond to industry challenges

"Although we have achieved good results in the first half of the year, we have already predicted the difficulties we may encounter in the second half of the year and are fully prepared." Xiong Xiaoming said that technological innovation is an important tool for Liugang to deal with challenges. Liugang is promoting high-end, intelligent and green transformation and cultivating new quality productivity.

Xiong Xiaoming emphasized the power of technological change: "A smart enterprise and a non-intelligent enterprise will form a clear distinction in the future." In terms of intelligent transformation, Liugang has made substantial progress. The Guangxi Iron and Steel Base's technologies such as intelligent steelmaking, automatic sample acquisition and production, 5G factories, and unmanned driving have matured. We strive to achieve full-chain data connection between dual bases by 2026 and build a procurement-production-sales collaboration system.

"In the next 3-5 years, enterprises that are the first to complete intelligent transformation will gain significant competitive advantages, and the industry may present a new pattern dominated by "technology generation gap". Xiong Xiaoming emphasized that the success of the transformation also depends on continuous R&D investment and the construction of industrial chain collaborative capabilities.

"By introducing advanced technologies and optimizing production processes, Liugang has continuously improved product added value and market competitiveness. The end customers' recognition of corporate products is also increasing, which has laid a solid foundation for companies to further expand the market." Xiong Xiaoming said.

Liugang's counter-trend growth is a microcosm of the active transformation of the steel industry during the period of deep adjustment. Xiong Xiaoming said that in the future, with the release of policy dividends and the further regulation of industry order, steel companies are expected to get out of the dilemma of "increase in volume but not increase efficiency" and achieve high-quality development.