Part 1: 2022 Work Summary
Since the beginning of 2022, Shisteel has conscientiously implemented the Group's various deployments and requirements. Under the premise of ensuring safety and stable epidemic prevention, it has comprehensively promoted technological upgrades, focusing on the two core tasks of cost reduction and price increase, continuously improving production and operation activities.
I. Adhering to the principle that "safety must be the top priority in any operation", making comprehensive safety capability assessment an important criterion for cadre selection, continuously improving safety management levels in the new area, achieving zero safety accidents.
Established the concept that "all accidents are preventable and controllable", with electric furnaces as the core, focusing on preventing high-temperature molten liquid leakage, quantitatively managing safety risks, achieving accident-free zone management. The construction of expert teams for mechanical protection and energy isolation was extended to the workshop level, including 125 company-level and plant-level experts. A total of 516 mechanical protection facilities were improved, and 780 new energy isolation points were added. In response to the increased capacity of the new area, the shift to four shifts/two rotations, and the first summer of full-capacity production, we strengthened the construction of the "dual control" mechanism, arranged for leading cadres to experience shifts firsthand, and promptly rectified identified issues. We strengthened the evaluation of cadres' comprehensive safety capabilities, conducting 442 evaluations of mid-level cadres and 1,946 evaluations of section/deputy section-level cadres, resulting in 38 safety-related impeachments and 43 cases of off-job training.
II. Treating environmental protection as a prerequisite for corporate survival, continuously improving, becoming the first short-process enterprise in the country to pass ultra-low emission acceptance inspection, designated as a positive example by the Central Environmental Protection Inspection Group, and officially promoted to Class A enterprise on December 26.
Added enclosed covers for electric furnaces, improved facilities such as raw material crushing lines and scrap steel sheds, continuously enhancing environmental protection levels. Established a digital comprehensive environmental protection monitoring and control platform; abnormal alerts decreased by 87% compared to 2021, with zero alerts since May, achieving high-standard, low-cost environmental operation. Through measures such as data fitting and optimizing slagging processes, cumulative nitrogen oxide emissions were reduced by over 50%, pollutant emissions (particulate matter) decreased by 88.46%, and sulfur dioxide decreased by 51.13%. The company's new area passed the on-site expert review for environmental performance rating organized by the provincial department on September 29, 2022, becoming the first short-process steel enterprise in the country to pass ultra-low emission acceptance inspection, and was successfully selected as a positive example in Hebei Province by the Central Environmental Protection Inspection. Concurrently, the company was awarded the title of Hebei Province Green Factory in 2022.
III. Vigorously promoting standardized operations, equipment facility integrity and completeness, model-based production, and intelligent manufacturing, achieving stable, high-yield production and improved efficiency.
Identified company-level and plant-level standardized operation demonstration points, such as power distribution in the steelmaking section and rolling mill assembly in the rolling production preparation area. Perfected 367 standard operating procedures. Implemented measures like visual management for electric furnace equipment failure troubleshooting to resolve production bottlenecks such as water leakage at the finger.
Formulated the "Plan to Strengthen Equipment Management, Establish the Concept of 'Zero Faults' in Equipment, and Improve Equipment Performance Indicators". Established a work promotion leading group headed by the General Manager. Leading cadres focused on on-site prevention, tackling bottleneck problems such as electric furnace finger arcing, conductive arm arcing, and water leakage from the water-cooled center piece. Main line and electric furnace equipment integrity rates increased by 5.64% and 7% respectively, with equipment failure impact time reduced by 20% year-on-year. Improved 78 process models including intelligent steelmaking, automatic refining, and one-key degassing, steadily enhancing production efficiency. The one-furnace one-machine rate reached 95.1%, with maximum daily molten steel output of 7,030 tons.
Deployed 262 sets of robots or intelligent equipment throughout the entire process flow for automatic temperature measurement and sampling, automatic labeling, automatic tagging, etc., replacing manual labor. Commissioned 9 intelligent models including electric furnace intelligent smelting and RH one-key processing. 38 robots were operational on three finishing lines. Multiple emerging technologies, such as unmanned scrap inspection, filled domestic gaps, realizing full-process intelligent manufacturing. The company was selected as one of the first 30 national "Digital Navigator" enterprises.
IV. Guided by comprehensive weekly quality assurance audits for bearing steel and analysis of physical samples, rapidly promoting comprehensive technological upgrading and high-end customer product certification, achieving sustained growth in high-end product volume.
Continuously advanced technological upgrades, strengthened quality improvement efforts, optimized processes such as deoxidation during refining. Achieved new breakthroughs in bearing steel deoxidation technology, realizing process cost reduction of 80 million RMB through 8+20 initiatives. The defect improvement rate for Class A non-metallic inclusions was 90.6%. Oxygen content in high-grade bearing steel stabilized below 5ppm. Shisteel is the first domestic special steel company to apply heavy reduction to cast slabs. The banding level of hub bearing steel 100Cr6 is domestically leading. Successfully developed domestic Class D round link chain steel as an import substitute. Accelerated high-end certification and volume increase, clearly defining 12 company-level and 110 sales center-level certification projects. Established comprehensive certification process records. Passed product certification from 152 high-end customers including Toyota (crankshaft), General Motors North America, Lycore, Pandrol UK, SAF-HOLLAND Germany, Denso, etc. Obtained certification for Timken rolling element steel. Successfully developed 38CrMoAlA (replacing electroslag steel) using continuous mold casting + ingot forging process, and die steel D-FS640. Successfully developed and delivered the largest domestically rolled specification φ400mm, 99MPa grade vessel steel 4130X. Received Class A quality evaluation for civil bearing steel from the Ministry of Industry and Information Technology.
V. Conscientiously implementing the Group's "Double 200" and the Company's "Double 400" targets, clarifying objectives and responsibilities, vigorously reducing various costs and expenses to ensure profitability and increase efficiency.
By clarifying objectives, formulating measures, and ensuring implementation, applying strong incentives and heavy assessments to responsible personnel, compacting responsibilities at all levels. Process costs decreased by 237 RMB/ton compared to 2021. Continuously promoted lightweight scrap, reducing the use of heavy scrap, and increased the scrap preheating ratio to stabilize above 90%. Power consumption per ton of steel in electric furnace primary melting was 355 kWh, a decrease of 59 kWh from 2021. Increased the recycling and utilization of self-produced scrap, improved scrap yield rate to 89.8%, reduced TFe in slag to 28.2%, increased billet yield rate to 96%, and achieved steel material consumption of 1,082 kg, a decrease of 13 kg year-on-year. Through cost reduction measures such as replacing nickel plates with nickel pig iron and low-carbon alloys with high-carbon alloys, monthly cost reduction was 25.66 RMB/ton. By optimizing operations, continuously improved ladle life and furnace life, reducing consumption of auxiliary production raw materials. The maximum electric furnace campaign life reached 1,203 heats, an all-time high. Continuously optimized slagging systems, persistently promoted low-slag smelting, reduced retained slag amount, achieving a monthly cost reduction of 12 RMB/ton for furnace charge slag materials. Through measures such as preventing piled-up steel accidents, optimizing the number of cut-to-length sections for each specification, and reducing head and tail losses, the finished product yield reached 95.69%, an increase of 1.25 percentage points compared to 2021.
VI. Adhering to the principle that success in scrap is half the success of the short process, continuously optimizing procurement processes and scrap structure, constantly enriching the procurement "toolbox", enhancing the competitiveness of scrap procurement.
Strengthened "proactive integrity, rigid integrity". Formulated the "Scrap Customer Discussion Management Measures", "Procurement Work Integrity Management Regulations", and "Guiding Opinions on the Scrap Working Group Linkage Mechanism". Established a working group participated by three company leaders to proactively engage with and listen to scrap customer opinions, build broad customer relationships, and effectively ensure scrap supply during periods of market volatility. Deployed 30 personnel from the raw material plant to form a scrap support team, enhancing scrap procurement service guarantee. Clarified procurement targets for business managers, delegated fund allocation authority to business managers, rewarding the good and penalizing the poor. Enriched the "toolbox" with 21 measures including unloading efficiency, using price increases only as the last resort. Vigorously promoted scrap "street sweeping", initially establishing stable relationships with 141 stalls and 8 bases. Optimized the charge structure model, promoted lightweight charge scrap, developed new low-cost material types such as long chip briquettes, identified 7 categories and 20 types of short-process dedicated scrap material resources. To date, scrap inventory remains at around 80,000 tons, with small and medium-sized scrap arrivals accounting for 80.76%, an increase of 20.42 percentage points from 2021, achieving structural cost reduction of 39.04 million RMB.
VII. Implementing "Four More Focuses", adhering to "Price is Marketing", taking production lines as independent market units, strengthening the front line of marketing, intensifying "street sweeping" and zero-distance marketing, achieving continuous growth in high-end customers.
Taking five production lines as independent market units, refining and strengthening order assurance during the market downturn. Each sales leader is responsible for one production line, clarifying responsibilities, rights, and benefits, equipping with full-time and part-time personnel to strengthen production line order assurance, resolving over 600 customer issues related to accurate specification, quality, and delivery, rapidly enhancing customer recognition and trust.
Strengthened customer engagement, using the North China Company's "street sweeping" as a model, clearly stipulating a 15% reward for personnel exceeding target prices, achieving volume increase from new high-end customers. Conducted "street sweeping" with 2,650 customers throughout the year, successfully developed 132 high-end customers, achieving high-end sales volume of 14,400 tons. Using Toyota as a model, achieved volume increase from existing high-end customers. In 2022, Toyota achieved sales volume of 26,000 tons, a year-on-year increase of 11%.
Selected outstanding technical and management personnel to form a full-time sales support team, rapidly strengthening the front line of marketing and implementing zero-distance marketing. At the end of February 2022, 93 outstanding personnel were selected and assigned to 13 branch companies for front-line full-time support for 6 months. In July, a second batch of 112 members was dispatched. In early June, 18 key members were deployed to form three special task forces, serving as support for the first support team and advance team for the second batch, further strengthening marketing efforts in weaker regions such as Guangdong, Anhui, and Northwest China. The support team resolved 805 customer issues related to accurate specification, quality, and delivery, benchmarked against advanced special steel companies, coordinated 45 quality improvement initiatives, and jointly developed 110 new customers.
