"Iron King" Shen Wenrong is gone

Chinese entrepreneur

2024-07-02 07:52The official account of China Entrepreneur magazine

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01 Shen Wenrong, chairman of Shagang, successfully developed a small steel mill into the second largest private enterprise in China after acquiring the "Phoenix Steel Mill" of ThyssenKrupp in Germany.

02 Shen Wenrong takes the low-cost expansion model as the core, and makes Shagang stand out in the market competition through continuous innovation and refined management.

03However, shagang is facing challenges in global competition, and it is necessary to adjust the management model and manpower structure to meet the competitive requirements of the international market.

04To this end, shagang plans to double its total sales in the next five years to 70 billion to 80 billion yuan, and at the same time introduce more international talents.

05 Shen Wenrong said that the key to the future of shagang is to cultivate an evergreen team to meet the needs of market competition and enterprise development.

Technical support is provided by Tencent Hybrid Model

Text: "Chinese Entrepreneur" reporter Pan Juntian

Edited by Zhang Hao

Header image source: Attempt library

Editor's note:

The Chinese steel "tsar", the notoriously "workaholic" and "barbarian" of the steel industry, is gone.

At 10:02 last night, Shagang Group issued an obituary, saying: "Comrade Shen Wenrong, Chairman of the Board of Directors of Jiangsu Shagang Group, passed away at 2:10 on June 30, 2024, at the age of 78. ”

In the past nearly 50 years, the entrepreneur who entered the factory as a fitter has led Shagang Group to become the largest private steel enterprise in China's crude steel output, creating many records in the industry, and Shagang Group is also one of the first private enterprises in China to enter the world's top 500.

In fact, from 2022 onwards, he has rarely appeared in the external information release of Shagang Group. The latest picture that can be found on the Internet is still at the end of 2022, and it is obvious that he has lost a lot of weight.

In June 2016, Shen Wenrong's son Shen Bin, who was born in 1979, took over and became the chairman of Shagang Group. Shen Wenrong's "cultivation" of Shen Bin has a strong personal style - the road that is recognized must be followed. In 2001, he went to the United Kingdom to study for a master's degree in economics, and Shen Bin entered the company after returning to China, from accountant to financial supervisor and even chairman step by step.

Shen Bin also maintains a general work rhythm with his father, every morning at 7 o'clock, will appear in the office on time, everyone gets off work in the evening, he is still dealing with work, "do not love the steel industry is unable to take over, into the steel production line, facing the high temperature liquid, highly tense work procedures, as the leader of the enterprise has to shuttle every day." ”

A number of practitioners in the steel industry mentioned that Shen Wenrong's health was "not very good" in the past. It is said that in the "battle for Nangang" that shook the entire industry in the past two years, Shen Wenrong did not rush to the front line, but participated in several important meetings "with illness".

He could have taken Shagang to a higher position - surpassing Angang and becoming the country's second-largest steel company in terms of output after Baowu Group, as long as the acquisition of Nanjing Iron and Steel Group was completed.

However, the process of this transaction, which was already "certain", was tortuous, and the three parties involved went to court because of this. In October last year, Shagang Group, Fosun Group and Nanjing Iron and Steel Group signed the "Mediation Agreement", Shagang Group voluntarily withdrew, and the transaction collapsed.

At that time he needed a "victory" too much. In recent years, the steel industry is in a period of deep adjustment, and the performance of Shagang Group has also been impacted, and the operating pressure is great. While revenue and net profit were able to maintain high-digit growth in 2021, in 2023, both core performance indicators are year-on-year declines.

At the semi-annual work conference held in July 2022, Shen Bin mentioned that the entire industry is currently experiencing large-scale losses and has a tendency to continue to expand, and the market situation is extremely grim.

The importance of Nanjing Iron and Steel Group to Shagang Group is not only reflected in the "superposition" of production capacity, which is already the core "rules of the game" of the steel industry. In 2019, Shen Wenrong foresaw this, "In the next 5 to 10 years, it is likely to return to the time when steel is not profitable." Either I buy someone else, or I get bought by someone else."

Another key point is that Nanjing Iron and Steel Group has always been regarded as a model of "small and beautiful" in the industry. In 2022, the output of 9.84 million tons can only be ranked outside the top 20, but if you look at the net profit contributed by each ton of steel, Nanjing Iron and Steel Group is among the best. In that year, the net profit of key enterprises fell by more than 70% year-on-year, and Nanjing Iron and Steel Group only fell by 48%, and the net profit contributed by tons of steel was still about 220 yuan, while most of the other large groups were only 200 yuan, and some were even only 50 yuan.

This is because the proportion of high value-added steel produced by Nanjing Iron and Steel Group is relatively high, the price decline is minimal, and the prices of some high-end products have also risen against the trend. Moreover, the customer groups are mainly oil and gas equipment, ships and offshore engineering, automobile bearing springs, construction machinery and rail transit, which are less affected by the recession of the real estate industry.

From the inside out, the acquisition of Nanjing Iron and Steel Group should be "a must do". So much so that when Guo Guangchang, chairman of Fosun Group, the equity transferor, found Shen Wenrong, Shen immediately made a decision, and in just 16 days, he took out 8 billion yuan of "sincerity money" and signed a contract.

Due to some historical problems, 11% of the 60% equity held by Fosun Group could not be immediately pledged to Shagang Group, laying the groundwork for the failure of the transaction. In the end, CITIC Group "intercepted the peace". Nanjing Iron and Steel Group exercised its "right of first refusal" to buy back the equity from Fosun Group and chose to cooperate with CITIC Group.

According to the "Economic Observer" and other media reports, Nanjing Iron and Steel Group was on the "more active" side in this incident, and the situation of Shagang Group made some personnel of Nanjing Iron and Steel Group feel "pressure". Shagang Group is known in the industry for being good at scale expansion and pursuing extreme costs, and at that stage, it is also focusing on reducing costs and increasing efficiency. Nanjing Iron and Steel Group has made a choice that looks more "stable" and "safe".

To a certain extent, this also directly reflects the perception formed by Shen Wenrong and the shagang group he shaped for the industry, and the term "steel czar" is very vivid, which comes from the tough style of his tenure.

In 1988, he wanted to empty his family to import a production line from the UK, and almost everyone was not optimistic, but he just didn't want to make only window frame steel. "If it is brought in and it doesn't work, I will make it an exhibition hall, and I will sell tickets so that my peers can learn from Shen Wenrong's lesson." In the end, this production line was a great success and was hailed as "a model for the third revolution in China's steel technology".

In 2001, Shen Wenrong even "moved" the Horsch Iron and Steel Company (also known as the "Phoenix" Iron and Steel Plant) under the German steel company ThyssenKrupp back to China as a whole, and the industry questioned that he bought a bunch of "scrap iron". In the end, the factory, which took 4 years and invested 20 billion yuan, realized the first "one-package to the end" production process in China, which greatly reduced costs and increased efficiency.

"This was called at the time the largest industrial relocation in Europe's post-war history." Zhao Honglin, vice president of Shagang, who was directly responsible for the whole process of the relocation, told China Entrepreneur.

Shen Wenrong is also a loyal fan of the "buy, buy, buy" model in China, and in his concept, shagang has to attack all the time, even if it comes with certain risks.

In 2006, it acquired Huaigang Special Steel, Henan Yongxing Iron and Steel and Jiangsu Yonggang in 2007, Jiangsu Xinrui Special Steel in 2008, Wuxi Xixing Iron and Steel in 2009, and Northeast Special Steel in 2017......

Shen Wenrong is confident that he also has the ability to digest "ambition". Unique low-cost control system, top-down workmania, fully market-oriented, detail-oriented, responsive...... In the domestic market where the state-owned iron and steel companies have the mainstream discourse, although Shagang Group has a strong "barbarian" flavor, Shen Wenrong's management style is indeed highly respected.

He instilled his "workaholic" culture in almost every employee. For a long time, the factory was filled with a tense production atmosphere. Workers work in three shifts, with administrative staff coming to work at 7 a.m. and often working overtime on Saturdays.

Shagang's salary level is also notoriously low in the industry, Shen Wenrong made no secret of this, "the development of enterprises is to pay the price, the cultivation of competitive enterprises is also to pay the price, Shagang has been in the leadership team and the masses of workers to unify the thinking, tighten the belt, to use good steel on the blade, all the money on the introduction of technology." ”

Although he is from southern Jiangsu, he looks like a northern man in the eyes of his subordinates. "Be happy, drink in a big bowl, eat meat, and slap you on the shoulder, it feels like an 'iron slap'." This is the evaluation of Shen Wenrong by a management of Shagang Group back then.

This "workaholic" lacks a sense of life, and there is a famous joke inside, one time he went to France to discuss business, and the other party arranged to visit local attractions. But as soon as he got on the tour bus, Shen Wenrong, who was still alive and well at the negotiation table just now, fell asleep with his head tilted after a while.

This is Shen Wenrong, Rong Ma life, the initial investment of 450,000 yuan of enterprises finally built a variety of steel annual production capacity of more than 100 million tons, total assets of 170 billion yuan, 15 consecutive years into the world's top 500 Chinese iron and steel, China's first private steel steel giant.

"A person has so much energy in his life, and he can only do what he wants to do well. As early as 20 years ago, we made up our minds that if we did not become the top five in China's steel industry and the top ten in the world's steel industry, we would not do anything else, and we would unswervingly do a good job in the main business. Shen Wenrong said in an interview in early 2014.

He achieved his goal that year, and he chose to stop and rest.

This article was originally published in the 15th issue of China Entrepreneur magazine in 2006.

(Text |.) He Yifan, Ren Xuesong, editor| Shenyin)

For the private steel company Shagang, for the past 30 years, it has been living in a competitive environment surrounded by strong enemies in the form of "catfish", and in the port of Shanghai, less than 200 kilometers from Zhangjiagang, where it is located, it is dominated by China's largest state-owned steel group, Baosteel Group. Under the dual pressure of state-owned companies and multinational capital, shagang has grown from a steel workshop of 450,000 yuan to a private steel company with an annual sales revenue of 40.5 billion yuan, and is also the fifth largest steel enterprise in China, second only to Lenovo in terms of scale.

But now, the rules of the game have changed, scale has become as important as speed and efficiency, and the Chinese market is inseparable from the global market. Since the beginning of the new century, the global steel industry has entered another golden age of mergers and acquisitions in history, as exciting as the climax of steel restructuring set off by Andrew Carnegie and JP Morgan at the end of the 19th century. The representative figure is Lakshmi Mittal of India. Since 2000, he has directed a series of acquisitions around the world, making Mittal Steel the world's largest steel producer by volume, and behind Mittal is a follower in Japan, the United States, Europe, and Russia.

In China, since 2005, mergers and acquisitions have gradually become the strongest voice in the steel industry. Just before and after Shagang's acquisition of Huaigang, under the arrangement of the local government's "visible hand", Shandong's Laigang Group may merge with Jinan Iron and Steel, surpassing Anshan Iron and Steel and Benxi Iron and Steel, which had "come together" in the same way, to become the largest steel enterprise merger in China so far. In addition, in North China, Tangsteel is united with Xuangang and Chenggang; In Central China, Wuhan Iron and Steel Co., Ltd. is united with Hubei Iron and Steel Co., Ltd. and Liushan Iron and Steel Co., Ltd. Baosteel, China's largest iron and steel group, has frequently raised its name in the secondary market, buying stocks of Magang, Bagang, Jigang, Laigang, Jiugang, Nangang, Anyang Iron and Steel, and G Guanggang.

The ceiling, which Shagang had already reached out to touch, was raised a lot again. Will Shagang join the race of the international steel giant "Big Stomach"? Shagang, which has created the highest steel production efficiency in China, can its low-cost expansion model be replicated like "Mittal"? In the unique ecological environment of China's steel industry, can an international steel tycoon like Lakshmi Mittal be born?

This is a question that many people want to know the answer to.

In Zhangjiagang in mid-July, the rainy season, which should have passed, flicked its tail to inject a touch of coolness into the hot weather. Shen Wenrong, 60, was in a relaxed and nervous mood, this is the first board meeting after Shagang Group spent $250 million to acquire Huaiyin Iron and Steel Group, and will reach a final agreement on the transfer of 26.15% of Huaigang's state-owned shares, while the previous acquisition of 64.4% of Huaigang's social legal person shares has been negotiated.

"This is just our first acquisition." The burly, rough-faced and loud chairman of Shagang Group told "Chinese Entrepreneur".

In this steel kingdom located on the edge of the Yangtze River and covering an area of more than 10 square kilometers, Shen is the absolute authority, "Shagang has only one boss, and that is Boss Shen." One of Shen's subordinates said.

Almost at the same time, on July 26, in distant Europe, an Indian named Lakshmi Mittal completed the largest merger and acquisition in the history of the modern steel industry, and the Mittal Group, the world's largest steel company controlled by him, announced on the same day that it had controlled nearly 92% of the shares of Arcelor Group, the world's second largest steel company, through the acquisition of action, a world super steel group with an annual output of 116 million tons of steel, an annual turnover of 60 billion euros, and more than 320,000 employees - "Arcelor Mittal Group" It's about to come out.

Compared to the sprawling ArcelorMittal Group, Mr. Shen's Shagang Group, a steel company based in the small eastern Chinese city of Zhangjiagang, is clearly far from the same order of magnitude. After the completion of the acquisition of Huaiyin Iron and Steel Group, shagang's output this year will reach 12 million tons, which is just 1/10 of the merged "ArcelorMittal Group", and the number of employees, shagang is 1/30 of the latter.

A senior source at the General Iron and Steel Research Institute revealed that in early 2005, Shagang had commissioned the agency to make a medium-term plan for upgrading its production capacity of 30 million tons, but due to the pressure of the country's macroeconomic control policy, the plan to expand in situ in Zhangjiagang was finally shelved. Now, Shen Yong's acquisition of Huaigang shows the next strategic intention of Shagang Group: external mergers and acquisitions.

"In accordance with the national iron and steel industry policy, the state is also requiring to improve industrial concentration and advocate mergers and acquisitions." This private business owner, who once served as a member of the Zhangjiagang CPPCC and deputy secretary of the municipal party committee, is cautious and sensitive to the policy environment. "We now have a new expansion plan," he said, adding that shagang is not ready to expand capacity based on the old mills, "We are already a 15 million ton steel mill now, and in Zhangjiagang, no matter how big it is, it is unlikely." ”

In the current wave of mergers in the steel industry, Shen Wenrong, who is as tough as iron, is unwilling, "Why can't we make 20 million tons or 30 million tons?" Shen waved his thick arm, some couldn't hide his excitement, he said that excellent domestic enterprises have their own expansion plans, and Shagang also has them.

Shen wanted to be able to control the pace of his expansion more prudently. "There are so many things that have not been done in China, and foreign capital has to do everything possible to attack and get a piece of the pie, why don't we do our own thing? When you have enough control at home, then it will be a matter of course to acquire abroad. ”

But the details still reveal Shagang's hidden ambitions, intentionally or unintentionally. July 17, Mittal, Arcelor, Pohang, Nucor...... The names of these world's steel giants are engraved on the nameplate of the private room of Shagang Group's internal restaurant, and Shen certainly did not want to invite them to dinner, which hints at the company's future frame of reference.

"Phoenix" relocated

The decision to purchase thyssenkrupp steel mill is of extraordinary significance to shagang, and it can even be said to be the most important watershed in shagang's growth. As a result, shagang's production capacity jumped to 10 million tons.

A seven-kilometre-long deep-water coastline lies quietly across the northern head of the beautiful city of Zhangjiagang, where two huge ships are moored in the rain and fog, and a conveyor belt extends from the fog to send reddish-brown ore directly from the ship to the factory on the shore.

Only a man in orange overalls hurried past on the docks, refusing to strike up a conversation: on the way to repair his hard hat, this would increase his chances of being criticized.

ThyssenKrupp's "Phoenix" steel mill now houses in a blue factory near the Shagang Haili Terminal. Previously, the modern steel mill was located in Dortmund, North Rhine-Westphalia, Germany. ThyssenKrupp is the world's ninth largest steel company, and its main products such as deep-drawn steel for automotive plates enjoy a good reputation in Europe, and are widely used by the European Electrotechnical Association and famous enterprises such as Mercedes-Benz and Volkswagen.

It was precisely because of the purchase of the second-hand steel mill "Phoenix" from arrogant Europeans that Shen Wenrong and Shagang attracted the attention of the world, and Shagang's production capacity jumped to 10 million tons. The current "Phoenix", with a length of several kilometers, is a 6.5 million tons of long-process steel plate production line, integrating sintering, coking, ironmaking, steelmaking, continuous casting, continuous rolling and corresponding supporting supply and assistance. Even the workers who participated in the relocation back then are now difficult to point out in its entirety, but after the lifting and modification under the guidance of voestalpine, it has been "unrecognizable" and has been reborn.

The decision to purchase thyssenkrupp steel mill is of extraordinary significance to shagang, and it can even be said to be the most important watershed in shagang's growth. Without this step, it is impossible for shagang to increase steel output to 10 million tons in the "Tenth Five-Year Plan", and it is difficult to quickly change the industrial structure of primary steel products such as bars and wire rods, but high value-added plates have been blank, and the time to enter the long process production line will be delayed for several years.

For Shen Wenrong, this seems to be a match made in heaven. In 2001, Shen Wenrong began to plan how to introduce a long-process production line, because at that time, the raw material scrap steel used in the short process cost more than 1,000 yuan a ton, and the iron ore used in the long process was only 400 yuan per ton. In addition, after years of operation, Shagang Wharf has become quite large-scale and has the ability to enter and exit. At this time in Europe, thyssenkrupp's "Phoenix" steel mill was on the verge of closure due to high costs and loss of competitiveness, and the management had begun to look for buyers.

Shen Wenrong got the news that the "Phoenix" steel mill was going to be sold in April of that year, and led a team to Germany in May for inspection. Originally, he only wanted to buy a set of hot coiling equipment, but after carefully inspecting the condition of the equipment, he decided to buy all the equipment for the whole process of sintering, coking, ironmaking, steelmaking, continuous casting, continuous rolling, etc. "Phoenix" has a total of four factories, with equipment from the 80s, as well as more advanced equipment from the 90s, with an original value of 2 billion euros, and these four factories are actually a complete set of assembly lines from sintering to profile. In the end, Shen Wenrong only paid 33.8 million euros for this second-hand equipment.

The Financial Times described the demolition as follows: a top-blown oxygen converter installed in a 60-metre-high building, a hot rolling mill with coils of more than a kilometre, a sintering machine, a blast furnace, and many other components, all packed in wooden crates, stuffed into containers, loaded onto ships, and then unpacked near the mouth of the Yangtze River. On the flat alluvial plain of the Yangtze River, and in strict accordance with the appearance in Germany, the equipment was reassembled without a single screw. A total of 250,000 tonnes of equipment was transported, plus 40 tonnes of detailed documentation explaining the reassembly process. The whole project is very complicated.

At that time, the number of Chinese faces in Dortmund was at least three times as large for a time, most of them were Chinese construction units attracted by shagang to participate in the bidding, and Shen Wenrong gave 300,000 yuan to each participating bidder, hoping to provide relocation advice regardless of whether he won the bid or not. In the end, Shagang chose Wuhan Design Institute as the construction design unit, Wuhan Iron and Steel Sintering Company as the construction unit of the sintering plant, and the iron-making plant, steel-making plant, and hot-rolled coil were contracted to China First Metallurgical Corporation, Wuhan Iron and Steel Construction Engineering Group, and China Machinery Third Installation Company, and the transportation contract was contracted to a German shipping company.

Shagang's cost control concept was vividly exerted in this demolition. ThyssenKrupp initially refused to be dismantled by the Chinese side, and Shen Wenrong was ruthless: I don't want the construction equipment if I don't let the Chinese side. In November 2001, Zhao Honglin moved into Phoenix with 1,000 Chinese workers, 200 of whom were from Shagang.

In the early morning of February 28, 2002, the steel mill removed the first screw. At the ceremony, the Chinese celebrated the start of construction by stepping on balloons, while the Germans were sad, in Dortmund's Herder and Westphalia districts, where generations of people have relied on steel mills to make their living, which have been making steel for nearly 200 years. Now, the factory is about to go to the East. The manager of the "Phoenix" plant burst into tears during his speech.

During the dismantling process, 30 German technicians accompanied the whole process, and the German signs such as "Do not smoke" and "Fire alarm, please use in case of fire" were all marked in Chinese. The Chinese workers and engineers live in the factory's original office building, each with five or six beds.

Each of these Chinese seems to be a workaholic, working 12 hours a day, even on weekends. This once made Dortmund's labor department very troubled. Initially, the forced demolition team of the labor department had to take two days off a week, but this was simply not possible, and it was finally agreed that they could work one day more on Saturday and have to rest on Sunday.

In order to prevent Chinese from secretly working overtime, the Herder District arranged helicopters in the air and patrol cars on the ground, but to no avail, Chinese the overtime on Sundays came up in an endless stream: they did not dismantle from the highest place, secretly hid in the workshop to pack and pack, and dismantled smaller equipment indoors...... Zhao Honglin said with a smile that he had been "taken" twice by the local labor department for education.

It's also a tough game. In order to save transportation costs, Zhao Honglin hopes that the container can use the gap space as much as possible and load more parts under the permitted weight and volume. But the foreign manager who was initially in charge of the project was unusually tough and unaccommodating. He insisted that one thing could only be one package. After several heated arguments, Zhao directly approached the other party's boss and demanded that he must be fired. How is it possible for the foreign boss to turn his face? Zhao said to give him three days to think. Three days later, the foreign boss finally relented and packed the boxes according to Shagang's plan, and the project manager was fired.

Shagang had planned to complete the factory in two years, while ThyssenKrupp thought it would take at least three years, but in the end, the Chinese workers left with 250,000 tons of equipment in just one year, and another six months to clear the plant.

At the Shagang Haili Wharf on the bank of the Yangtze River, the dismantled "Phoenix" steel mill was reorganized. Shen Wenrong hired voestalpine, a world-renowned engineering design and metallurgical company, to design, evaluate and transform the "Phoenix" as a whole. Including equipment purchase, transportation costs, and follow-up technical transformation and plant construction costs, shagang invested nearly 20 billion yuan in total, and finally built an iron-making, steel-making, continuous casting and continuous rolling project with an annual output of 6.5 million tons in four years. Usually from the purchase of new equipment to the completion of the furnace, the construction period of a steel production line of similar scale is 8 years, and the total investment is as high as 30 billion yuan.

In an interview with China Entrepreneur, Olaf Silbermann, project manager for mechanical design and processes at voestalpine, said: "voestalpine has not undertaken a larger industrial relocation project than this one, and it has been the most successful one so far, which is a great challenge for all parties involved." ”

On June 18, 2005, on the eve of the production of the first coil, Shen Wenrong moved a stool and sat next to the renovated "Phoenix" rolling mill, looking focused and nervous, "like a child waiting for a Christmas present" (Olaf Silbermann). On June 19, 2005, the factory successfully debugged at one time, and produced the first batch of coil products in the history of shagang.

"At that moment, everybody felt like they were champions." Roland Scheich, voestalpine Automation Project Manager who was present to witness the scene, said that for the first time in his career, he felt such a strong sense of achievement. He has done a variety of different engineering projects around the world, and has never seen a top leader like Shagang come to the scene in person.

He and his team were also impressed by the fact that "there are many experienced people in European steel companies who can produce very high quality steel, but they are also limited by their own experience. Although the steelworkers of Shagang are not as experienced as Europeans, they have no frame in their minds, and they will give everything they can to turn their dream craft into reality. ”

"The 'Phoenix' flew away, and the Herder District became the first place in the world to experience the amazing power of China's rise." The relocation of thyssenkrupp's "Phoenix" steel mill prompted Jinqi, the former chief correspondent of the Financial Times in Beijing, to explore the source of energy for China's revival. The conclusions of the exchange with Shen Wenrong were finally written into a best-selling book - "China Shakes the World".

The decision of the "tsar".

"An enterprise must learn to enjoy the conditions and environment for your development in this era, and shagang has grasped this point." Ma Zhongpu, an expert from Lange Iron and Steel Company, said.

Shen Wenrong - The ruler of this steel kingdom has a complex personality that is different from ordinary people. Raunchy, fierce-tempered, steel-willed, and market-sensitive like a falcon, he dictates to his subordinates like a king and a dictator.

Although he is from southern Jiangsu, Shen looks like a northern man in the eyes of his subordinates. "Be happy, drink in a big bowl, eat meat, slap you on the shoulder, it feels like a slap in the face." A vice president of Shagang said with a smile.

Regarding how this "workaholic" lacks a sense of life, there is a joke in Shagang that he went to France to discuss business, and the other party arranged to visit local attractions. But as soon as he got on the tour bus, Shen Wenrong, who was still alive and well at the negotiation table just now, fell asleep with his head tilted after a while.

In the eyes of many foreign engineers who came to Shagang, Shen Wenrong, who forged Shagang from a small cotton ginning factory to China's second largest private enterprise, has absolute control. "He's a steel 'czar', very controlling, and very quick and decisive in making decisions. But he's not a man floating in the air either. Johannes Wahlmuller, voestalpine Finance Manager, says.

This probably doesn't match the impression you get from Shen Wenrong's resume. In 1968, after graduating from the provincial secondary school - Jinfeng Cotton Processing School in Shazhou County, Jiangsu Province (the predecessor of Zhangjiagang City), he entered Jinfeng ginning factory. Starting from the fitter, he has successively served as the leader and squad leader of the fitter group, the deputy director and director of the machine repair workshop, the secretary of the factory league branch, the secretary of the general party branch of the factory, and the deputy secretary of the party committee of the factory. In 1983, at the moment when the steel plant was officially separated from the mother ginning plant, Shen Wenrong, who had participated in the construction of the rolling workshop, served as the deputy director and deputy secretary of the party committee of the steel plant, and on July 21 of the following year, he was corrected by the Shazhou County Party Committee and replaced the old factory director Zhang Yaosheng.

In fact, the history of shagang can be traced back to 1975. At that time, there was almost no decent industry in Shazhou County. In order to develop industry, it is necessary to have iron and steel, but under the planned economy, the unified distribution of steel is pitiful, so the county proposed to let the Jinfeng ginning factory on the Yangtze River to engage in steel, because it is the largest plant area in the county-run collective enterprise.

Zhang Yaosheng, the director of the factory at the time, bought a batch of second-hand equipment with 450,000 yuan borrowed from Dong Nuoxi, and produced the first batch of steel with the original workshop method. Due to the shortage caused by the planned economy, the early shagang achieved good benefits despite the primitive equipment. By 1983, the annual output of shagang was less than 10,000 tons, and there were seven or eight kinds of products such as small round steel, small rebar and small angle steel. The entire land of southern Jiangsu is full of small steel mills like Shagang.

Like many grassroots entrepreneurs who rose in that era, Shen Wenrong also had amazing market instincts.

In 1984, as soon as he came to power, Shen made a major decision: shrink the product line, the window frame steel that large enterprises disdained and small enterprises could not scale as the leading product, and by 1988, it had established 4 window frame steel specialized production lines, the output of window frame steel reached 130,000 tons, and the domestic market share reached 60%, "At that time, the price of window frame steel, Shagang said, there was no counteroffer." ”

By the end of 1988, Shagang had accumulated more than 100 million yuan in funds, and it was rumored in the industry that it could "sit and eat for ten years". Shen still decided to smash all his family into it, and bought a 75-ton ultra-high power electric furnace steelmaking, continuous casting, and continuous rolling short-process production line from the British Bizton Steel Mill to produce rebar. At the plenary meeting, he waved his hand, "Even if the equipment is bought, it can't run, and it has to be put there to make an exhibition hall, and I sell tickets at the door myself, 5 cents a piece, so that my peers can learn Shen Wenrong's lesson." Soon after it was put into operation in 1992, Deng Xiaoping's southern speech ushered in the climax of infrastructure construction, "The 75-ton project with an investment of 300 million yuan was all earned back in less than three years." ”

In 1993, Shen Wenrong invested 1.3 billion yuan to introduce the latest short-process equipment, 90 tons of ultra-high power vertical electric furnace from Germany, six machines and six continuous casters from Switzerland, and a fully continuous high-speed wire rod rolling mill from the United States, and finally let Siemens of Germany provide all electrical equipment and automatic control equipment, and built a 90-ton electric furnace known as "Asia's first furnace".

In 1997, Shagang decided to cooperate with POSCO Investment in the stainless steel plate project. In order to get the approval, Shen Wenrong went to Beijing seven times to report to the relevant departments. Once, he went to the Ministry of Metallurgical Industry to report, but the minister went to Hainan, and Shen Wenrong immediately took a plane to Haikou, but the minister got off the iron mine again, and he hurried more than 250 kilometers overnight to chase to the mine. Later, the high-level approved the four words "not as an example", and the project of producing 150,000 tons of stainless steel sheet and 150,000 tons of hot-dip galvanized sheet was finally won by him. By the end of July 2006, the third phase of the project had been put into operation.

In 2001, Shagang completed the restructuring of the enterprise, and the state-owned shares were gradually withdrawn. On this issue, the leaders of Zhangjiagang City did not agree on this issue, some wanted to keep 30%, others thought that only 20% should be retained, and then a compromise to keep 25%, and by 2004, this part of the shares was bought back by the management of Shagang, for which Shen is said to have borrowed money from the bank.

In 2001, at the moment of the national "Tenth Five-Year Plan" steel production restrictions, Shen Wenrong "went against common sense" and decided to buy "Phoenix" and go against the current of 6.5 million tons of plate project. Shagang finally outperformed the time, the project obtained all the legal procedures before the macro control, and because it was put into production in phases, half of the equipment has been put into production when the macro control force, and half of it has also entered the final stage, "If it was all a half-cut project at that time, it would definitely not work." Recalling, Vice President Zhao Honglin now has palpitations.

The boss of South Korea's POSCO, which produces stainless steel in a joint venture with Shagang, commented on Shen Wenrong: "At first, we thought he looked like Zhang Fei, but later we found out that he was comparable to Zhuge Liang. ”

"Barbarian" genes

Unique low-cost control system, top-down work frenzy, completely market-oriented, detail-oriented, responsive...... In China, where state-owned steel companies have the dominant discourse, shagang has some indescribable "barbarian" genes.

Like a bad boy who suddenly appeared in a group of good boys, Shagang was born in China, where state-owned steel companies have the mainstream discourse. In 1999, shagang ranked 13th in the output ranking of national iron and steel enterprises, and rose to 10th the following year, followed by 7th in 2001 and 5th in 2005. And it's all about growing internally.

An anecdote circulating in the local area is that Wu Dongcai, the owner of ———Yonglian Steel, another large steel mill in Zhangjiagang City, felt that he had too many people after visiting Shagang, and immediately laid off 1,750 employees after returning home.

The whole shagang is a machine running at super high speed. Shen Wenrong took "how fast and good the province" to the extreme. Shagang's sales in 2005 exceeded 40 billion yuan, 12 million tons of steel output, and Shagang's workers were less than 10,000, that is to say, Shagang's per capita steel output reached 1,062 tons, even more than Baosteel, whose technology and equipment are far superior to their own, ranking first in the national steel industry.

Shen Wenrong instilled his "workaholic" culture in almost every worker in the factory. The whole factory is filled with a tense production atmosphere. Workers work in three shifts, and administrative staff go to work at 7 a.m. and work until 5:30 p.m. And there are no days off on Saturdays. A mid-level shagang joked that there are many violations of labor laws in shagang, and overtime is commonplace.

In terms of cost control, Shen Wenrong can be said to have "picked" to the limit. Shagang's wages in the industry is not high, Shen Bu said, "the development of enterprises is to pay a price, the cultivation of competitive enterprises is also to pay a price, Shagang has been in the leadership team and the masses of workers to unify their thinking, tighten their belts, to use good steel on the blade, all the money for the introduction of technology." ”

"No matter what kind of company boss or what level of leader, Shen all entertains guests in the company's executive restaurant, and if you stay there for a week, basically the dishes will not change every day." Fu Qiqing, president of Wanshunchang Group, a steel trading company that has been doing business with Shagang for many years, said. He believes that Shagang can fight out from many private small steel, thanks to Shen Wenrong's super cost control ability. "It is not easy for Chinese steel mills to make money with a long process, but shagang can make a lot of money with a short process, and their investment in building a steel mill of the same scale is often 1/3 of that of their peers, and they have even invented a process that allows electric furnaces to use molten iron, reducing energy consumption by several times."

In 1994, when Shagang built the Runzhong branch plant, Beijing Iron and Steel Design Institute proposed a design plan according to the standard, with a cost of 2,500 yuan per square meter and a total investment of 2.2 billion yuan. Shen Wenrong felt that something was wrong and asked to revise the plan, but the investment was reduced to about 1.3 billion yuan, and the plant cost was changed to 1,580 yuan per square meter. Shen was still not satisfied, so he asked the Jiangsu Design Institute to design the plan, and asked them to design the scheme according to the method of shagang, and use the channel steel and angle steel bought back from the former Soviet Union at the price of scrap steel, as long as it is safe, reliable, beautiful and generous. As a result, the cost of the plant was only 780 yuan per square meter, with a total area of 25,000 square meters, saving 43 million yuan.

On the other hand, shagang is very sensitive to market changes. "At that time, it was inevitable to follow the changes on the surface of the market, and it was inevitable to take a slow step, but if you follow Shagang, you will not lose the opportunity because the quotation is too high or too low for the time being." Fu Qiqing said.

From 1985 to 1997, Shagang implemented more than 100 projects, but did not set foot in the plate, many peers persuaded Shen: "Old Shen, you also make some high value-added plates." Shen Wenrong smiled, and had a plan in his heart, it was a period of large-scale infrastructure construction, and the construction oil and water were very sufficient. It doesn't have to be a high-end product that can really bring you profits, at a certain stage, it may just be a spectacle. ”

In addition to Shen Wenrong, Shagang also has 19 vice presidents, and this huge senior management team has to meet on time at 4:30 p.m. every day, which lasts for three hours. Among the CEOs, except for Shen Wenrong, all the executives are seven or eight people crammed into an office, according to Shagang, which not only saves office costs, but also has the highest work efficiency, and can quickly communicate and make decisions when there are things.

Shen Wenrong has nothing to do with management, and the management authority of Shagang's senior management team is usually shifted downward, and almost every vice president has his own branch and workshop. This has formed a unique flat management model in shagang. Legally speaking, the subordinate branches and trading companies are independent legal persons, but for group companies, these branches and companies are workshops (sections) and offices. At present, the proportion of the company's management personnel only accounts for about 6%~7% of the total number of employees.

Under this flat management structure, people, property and property rights are highly centralized. More than 40 branches, sections, trading companies and other institutions under the group, including personnel recruitment, fixed posts, raw material procurement, product sales, bank credit, are all centrally managed by the group company. Each branch has independent accounting, the financial personnel are centralized, and the branch provides loans to the group company according to its needs. Funds are highly concentrated, and all external payments are subject to the approval of the main leaders authorized by the chairman of the board of directors.

In order to strengthen the company's execution, Shagang has indicators for everyone from the CEO to ordinary employees, and they are measured through qualitative and quantitative indicators. Taking safety management as an example, Shagang implements a strengthened responsibility system for leaders at all levels and issues indicators to find violations of rules and disciplines. Leaders at all levels are required to go down to the workshop to inspect once a day, and 8 problems must be found throughout the month. Team leaders, workshop directors, and branch directors all have indicators. Bonus will be deducted if the target is not achieved.

Shen Wenrong has extremely strict control over the management, for example, some middle-level managers in charge of import and export business have not yet gone abroad. But at the same time, Shen is also quite good at encouraging employee morale. At the end of 2005, at the commendation meeting of the group's outstanding scientific and technological personnel and employees, he personally gave away several Santanas, and the winners were ordinary employees, and the important work that Shagang is doing is to institutionalize similar awards.

Headquartered in the United States, World Steel Dynamics (WSD) is the most influential international steel industry information consulting organization, and annually selects the "world-class steel companies" with the strongest comprehensive competitiveness in the world. Among the 20 evaluation indicators set, it involves a wide range of areas such as operating costs, technological innovation, profitability, domestic market growth, regional dominance and low-cost financing channels, and capacity expansion, and has a more comprehensive and authoritative evaluation of the competitiveness of enterprises. In the ranking in the past five years, Shagang and Baosteel, Anshan Iron and Steel and Masteel have been among them. According to the results of the 2005 evaluation, Shagang's competitiveness ranked 14th in the world, second in China, and Baosteel in first place.

The road to expansion

"If I had Mittal one-half of the easy international financing terms, I would have been able to buy 100 million tons in China alone." Shen Wenrong didn't know whether to envy or sigh, "5 years ago, Mittal was only 7 million tons ~ 8 million tons, not as big as Shagang now." It wasn't born to be a big steel mill. ”

"To acquire Huaigang, we spent 90% of the money and controlled 80% of the equity." Shen Wenrong told China Entrepreneur, but he did not explain the meaning of the sentence. It is said that a small part of the 90.55% equity that Shagang plans to acquire this time may be reserved for the top management of Huaigang. Huaigang executives and other natural person shares accounted for 9.45% of Huaigang Group, which was not included in this acquisition.

"The transfer of state-owned shares still needs to go through several processes such as listing," said Li Xinren, assistant to the chairman of Shagang, "and the leaders of Huai'an City have made a commitment to give a result no later than October." ”

In any case, there is no suspense that Huaigang fell into the bag of Shagang, after the board of directors meeting, two vice president-level executives of Shagang will go to Huaigang to take office, Huaigang Group former chairman and general manager He Daping is still the general manager, Shen Wenrong is the chairman.

This is the first large-scale mergers and acquisitions of shagang with self-rolling development as the main line, according to a senior executive of shagang, since the 90s of the last century, shagang has considered buying a factory, but always can't make up his mind, "or make up his own things rest assured, but also easy to manage."

Shagang has carried out the assessment of Suzhou Iron and Steel Plant's product structure, personnel quality and other aspects, "I think it is not appropriate, our workers and their workers are unwilling, we have a different system, they are very comfortable, we are very hard, they are afraid of bondage, and we are not willing to get a burden." ”

Shen Wenrong provided another explanation, saying that Shagang's intention to acquire Sugang belonged to the local government, "We didn't want it, if we transform this enterprise, the price is too great."

Shen Wenrong has been friends with He Daping for a long time, and he also admires the management level of Huaigang, "Similar to our shagang, it is also known for its 'strictness'. He Daping has repeatedly expressed the idea of leading Huaigang into Shagang Group, but it is only a verbal will, and he has not formally sat down to talk.

At the beginning of 2000, under the mediation of the provincial government, Huaigang and Nanjing Iron and Steel became a holding subsidiary of Nanjing Iron and Steel Group Co., Ltd., and the state-owned assets of Huaigang were allocated to Nanjing Iron and Steel Group free of charge. In 2002, Huaigang absorbed 400 million yuan of share capital of four enterprises including Zhuhai Guoli and natural persons such as management and became a non-state-owned holding limited liability company.

In the second half of 2005, Shagang and Huaigang began to formally contact about the acquisition. Huaigang is located in the economically underdeveloped but resource-rich northern Jiangsu region, there are no strong competitors around, and the products are mainly high value-added special steel, at present, the position in the field of special steel in the country is second only to Xingcheng Special Steel, another major iron and steel enterprise in Jiangsu Province, which is starting to adjust the product structure of Shagang is quite attractive.

Shagang is not the only one that is optimistic about Huaigang, Mittal has been involved through intermediaries in Singapore, and Hong Kong's Fok Ying Tung Group and CITIC Pacific Group have also contacted Huaigang. Among them, Zhongxing Pacific has a controlling stake in Xingcheng Special Steel, and if it acquires Huaigang, it will be able to control more than 50% of the special steel market share in the mainland and become the leader of China's special steel. But at that time, it was not Zhongxing Pacific that made great efforts to Huaigang, but Baosteel. Baosteel has sent a research team to Huaigang, and the merger plan has even been submitted to the State-owned Assets Supervision and Administration Commission.

Shagang was able to win in the end, in addition to the common language of the two systems, the local government undoubtedly played an important role, when the Huai'an municipal government and a former secretary of the municipal party committee of Zhangjiagang City came forward as an intermediary, Shen Wenrong, who had refused to "pull Lang match", this time calmly accepted.

"Of course, first of all, Huaigang does not exclude us, and then we can let the government play its role. It's like marrying a daughter-in-law, if you talk to your mother-in-law first, arrange a marriage, what's the point, can the marriage be happy? Shen Wenrong said, "They (the local government) also know that Shagang wants to make Huaigang bigger, not sell it." In addition, Huaigang itself once had state-owned shares, so there is no need to jump into the cage of state-owned enterprises. In 2005, Huaigang produced 1,558,800 tons of steel, and Shen's goal is to increase its output to 3 million tons within two years, he said, and the project has been approved.

"If I had Mittal one-half of the easy international financing terms, I would have been able to buy 100 million tons in China alone." Shen didn't know whether to envy or sigh, "5 years ago, Mittal was only 7 million tons ~ 8 million tons, not as big as Shagang is now." It wasn't born to be a big steel mill. He can acquire and merge within 5 years, because he has an international financing platform, behind which there are international funds, investment banks, and of course, expansion plans. But no matter how ambitious the plan, without external capital, with your own money to buy, can you buy Arcelor? With an acquisition of 32 billion US dollars and more than 200 billion yuan, which company has such conditions? There is no such platform in China, not only for private enterprises, but also for state-owned enterprises. ”

Whether it is passive or active, Shen Wenrong himself has realized that "there is no need, and it is not easy to build a factory from scratch, and the next step must be mergers and acquisitions." Either it is merged and reorganized by others, or it is merged and reorganized, and there is no other way."

"Huaigang's acquisition target after is a secret, and it can't be done if you talk about it," Shen Wenrong tried to keep his voice down, "but I can tell you a principle, that is, 'easy first and then difficult, near first and then far, inside first and then outside'." ”

Like many steel companies, shagang has formed a close relationship with banks. Continuing the development idea of "making a dollar out of oneself and lending a dollar" at the beginning of the business, the asset-liability ratio of shagang has been maintained at around 50% before 2000, but in 2001, the purchase of steel mill equipment of ThyssenKrupp in Dortmund of Germany has greatly increased the debt ratio, reaching 59.85% by the end of 2004 and falling slightly in 2005.

According to Li Xinren, assistant to the chairman of shagang, shagang had planned to be listed in China in 2000, but did not plan to go public as a whole, because the group and the branch of the financial tie is too close, involving related party transactions, coupled with the same year in the restructuring involved energy, so the listing was not successful, after that, shagang has not moved the idea of listing.

The rumors about Shagang seeking capital cooperation have never been broken, from last year's POSCO to acquire 50% + 1 of Shagang's equity, to the recent strategic alliance between Shagang and Fosun, the message conveyed seems to be more form than content, Fosun President Guo Guangchang said that "there is not much to talk about now", but some people in the industry speculate that for Shagang, Fosun's skillful capital operation ability may be more attractive to Shagang.

"There are no technical obstacles to shagang's use of the capital market for financing and acquisitions in the future," said Fu Qiqing, a veteran of the steel industry. With the industrial status of shagang, there should be many masters of capital operation who are already lining up to knock on the door. ”

The test of globalization

Global competition is imminent, and Shen Wenrong's top priority is to make new adjustments and changes to Shagang's management model and human structure, which will determine Shagang's future.

On June 29, a giant bulk carrier loaded with 175,000 tons of iron ore returned from its maiden voyage in Australia and arrived at Shagang Terminal after being unloaded to more than 80,000 tons at Beilun Port in Ningbo.

The ship, named Shagang No. 1, is the size of 30 standard basketball courts and has a maximum deadweight of 177,000 tons. Daiichi Chuo Kisen Co., Ltd. built the ship for Shagang and signed a long-term 10-year contract for the transportation of ore.

Like other Chinese steel companies, shagang has been forcibly coerced into a global melting pot because of iron ore. China is known as a "hungry country" in the global energy and resources industry, and shagang is also a "Chinese buyer" who carries money bags around the world.

Now, Shen Wenrong and Shagang have experienced another kind of globalization, unlike the "Phoenix Steel Mill" that bought ThyssenKrupp, this time it is passive, and there is even a lot of helplessness. The "Chinese buyers" who buy 75% of the world's iron ore have not yet formed a strong pricing power, and the "Chinese price" has not yet emerged. Shagang had to accept 71.5% (2005) and 19% (2006) price increases from international iron ore manufacturers.

The performance of Baosteel and the Iron and Steel Association at the negotiating table was not satisfactory. "They don't have the ability to adapt, they can't adapt, they should choose the strategy that is most beneficial to China, but they can't." Mr. Shen complained that at the negotiating table, no one spoke for private companies like Shagang.

Today's shagang has an increasingly strong demand for iron ore. Wang Xinghong, director of the import and export department of Shagang Group, said that in 2005, Shagang imported 12 million tons of ore, and plans to import 16 million tons in 2006.

Six years ago, the demand for iron ore in shagang was almost zero. At that time, the production process of shagang was mainly short-process electric furnace steelmaking. Electric furnaces eat scrap instead of molten iron, and scrap comes mainly from the United States. Now, about 500 meters away from Shagang Haili Wharf, mountains of steel purchased from shredded machinery and household appliances are still everywhere, and the process of shagang has been transformed into a combination of short and long processes, and they will still not be abandoned.

At the beginning of 2004, Shagang Group and Wuhan Iron and Steel Group, Tangshan Iron and Steel Co., Ltd., Masteel Co., Ltd. and one of the world's three major iron ore companies - Australia BHP established a joint venture company to jointly operate the Australian Jimblebar Iron Ore Mine, so that according to the investment ratio, Shagang can obtain 3 million tons of cheap ore powder every year.

At present, more than 100% of Shagang's ore needs to be purchased, and the proportion of foreign imports is 90%, and Shen also has the idea of participating in more iron ore in China.

Among China's domestic steel companies, shagang's control over resources is not prominent, and its previous performance has been even more lackluster. The leasing of "Shagang No. 1" and the participation in the BHP iron ore mine in Australia are only the first steps to cross the gap of globalization.

Another key test for Shen Wenrong is how to upgrade Shagang's low-cost expansion model in the future and replicate it in acquired companies like Huaigang.

As we all know, one of the keys to Mittal's successful global expansion is that no matter what kind of "broken iron" it was before the acquisition, after Mittal dispatches its own technical and management team, these people will turn over the entire factory from product structure, finance, management, and sales, and copy their low-cost operation model to the acquired company, and eventually turn losses into profits and come back to life. This is obviously inseparable from Mittal's own strong human capital strength and replicable management model.

Over the next five years, Shagang aims to double its total sales without increasing production capacity. In five years, it is hoped that it will reach 70 billion to 80 billion yuan. Shen Wenrong said, "It is entirely possible to rely on the upgrading of the industrial structure, the elongation of the industrial chain, the fine management, the circular economy, and the mechanism innovation." ”

"The per capita steel production of shagang exceeds 1,000 tons, but the potential is still very large." Shen Wenrong said that no matter whether it is compared with domestic or international comparisons, not all indicators of shagang are the best. Taking wire rod as an example, although shagang has the largest domestic output, it cannot be said that the product is the best. In fact, the cost gap between shagang in many indicators is still very large. He said, "The next step in the improvement of labor productivity is not to pick up the burden as in the past, pick 200 catties, pick 200 catties, and now you can push it with a trolley, pull it by a truck, or a person." ”

However, the strings of shagang's human resources have been tightened. After the acquisition of Huaigang, two of the 19 vice presidents of Shagang will take up their posts, and before that, four vice presidents have reached retirement age. Shagang's deployment at the top management level is already stretched.

In the flat management structure of Shagang, the management functions of the 19 vice presidents are too profound, which also damages the enthusiasm of middle managers to a certain extent. "We are short of cadres here, especially at the middle level, there is a shortage of workshop directors, and there is also a shortage of department directors. At present, there are more than 400 people in the middle level, and there are enough in terms of quantity, but not enough in quality, and it is difficult to enrich the new blood. Li Xinren said that he believes that one of the difficulties is that "the people invited from outside are not very practical, and the people he cultivates are too slow to grow."

The so-called "impractical", another Shagang executive believes that "many of the people invited are from state-owned enterprises, and it is difficult to carry them out of the bed in the middle of the night".

Not only middle-level cadres, but also many college students who have just entered Shagang also need a difficult adjustment process. Shagang's attrition rate of college graduates is relatively high. A squad leader in the workshop told "Chinese Entrepreneur" that he had been in Shagang for less than a year, and almost all his colleagues in the same group had been lost, so he was naturally promoted.

This is a red flag. Shen Wenrong was born as a farmer and graduated from junior high school, while most of the 19 vice presidents under him did not exceed high school on average, which cultivated a pragmatic and down-to-earth style of the company, but it was a constraint on the company's long-term expansion plan. At the grassroots level, migrant workers make up the majority of workers, and they have helped Shagang create the myth of China's largest steel output per capita, but their experience and technological innovation capabilities are mediocre.

Shagang's tight work rhythm and selfless working atmosphere discourage many people from leaving. "Frankly, it's hard for me personally to work under such pressure, but I salute these hard-working people," says Johannes Wahlmuller, voestalpine Finance Manager, "and that's one of the reasons why Shagang has been successful, but what I don't want is that after five years, Shagang has become more successful and many of my friends are tired now." ”

A group of old shagang people who grew up at the same time as the enterprise are the backbone, "but it was originally five production lines, and now it is fifteen production lines, the expansion is too fast, and the manpower is a little weak." Chen Ying, chief economist of Shagang, said.

The company's new equity incentive plan will soon enter the operational stage, and specific measures are expected to be introduced by the end of the year. In 2001 and 2004, after two restructurings, Shagang management held a large share, reaching 87.7%, of which Shen personally held 29.98%, with the development, some newcomers took up leadership positions, many of them only have the right to dividends of shares, but no ownership. "This contradiction must be resolved, otherwise what should we do? It's not long to sit down. The top management can take care of the enterprise as if it were their own children, and they must pass on this feeling and cannot rely only on ideological education and strict management. A younger vice president told China Entrepreneur. Another situation must also be considered, if shagang in the future by way of share exchange or cross-shareholding as a means of merger and acquisition, also need to make arrangements in the equity structure.

"The first article of Shagang's 'Eleventh Five-Year Plan' is not to increase the production of how many tons of steel and how many tons of iron, but to solve the problem of people. Shen Wenrong said.

For Shen, who is already 60 years old, the question of a successor has begun to surface. His two sons, one in Hong Kong and the other young. However, Shen Wenrong believes that it is impossible for his children to take over. He humorously said that they can come to Shagang to work, they can be the group leader and squad leader, but it can't be his position. "Shagang is a joint-stock enterprise, responsible for shareholders, to find a person who can bring Shagang to the future." He said that his management authority has been delegated to the following vice president, from now to the next five years of the task, one of the focuses of his work is to select people, select professional people, people who can bring Shagang to the next 30 years.

Not only is it a human problem, Shagang is also trying to channel the pressure brought by the speed of development to the management structure and informatization, "the next stage of the various introductions have come out, but it will take time to connect these introductions." Chen Ying said.

"From the adjustment of product structure to the international market to the acquisition of Huaigang, Shen Wenrong has strategically rolled out all the problems of shagang," said Ma Zhongpu, an expert at Lange Steel Consulting. ”

Shen Wenrong does not admit that he is China's "Mittal", but this Chinese "steel czar" inadvertently reveals his ambition and restrained domineering. "It's still too early to tell, but in 20 years, who will be the boss and who will be stronger?"

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