The Belt and Road

Iron Man from China making Chinese miracle

In 2016, 9 Chinese Iron Men came to Serbia and created a China Miracle of “1+9=100000”.

It is the 9 Chinese faces shown in the photo, who have changed the fate of 5,000 employees in a century-old Mill and the life of 100,000 people in the city.

A few days ago, the Publicity Department of the CPC Central Committee awarded them the title of “Model of the Times”. What is the story that touches every one behind this supreme national honor?

THE PROBLEM AMERICANS FAIL TO SOLVE

The story took place in the century-old steel Mill located thousands of miles away from China. The Smederevo Steel Mill once was “the pride of Serbia”, failed in the harsh winter of the economy.

In July 2002, this state-level “Giant” steel Mill had to declare bankruptcy. Undoubtedly, this was a disaster for Smederevo, since it was the Mill that breeds the city. In September 2003, the world-famous US Steel signed an agreement with the Serbian government, in a bid to formally acquire this century-old steel Mill.

Just 5 years later, against the backdrop of the world financial crisis in 2008, the steel Mill suffered huge losses again. After struggling for 4 years, the US Steel sold it to the Serbian government at the price of $1 in 2012.

The Mill, a giant in the past, became big trouble. As it struggled to make ends meet, the Mill was no longer the pride of but a big headache to Serbia

HELLO! “SUPER STEEL TEAM” FROM HEBEI OF CHINA

After nearly a year’s consultations and negotiations, on April 18 of 2016, China Hebei Iron and Steel Group (HBIS Group) acquired this century-old steel Mill at the price of 46 Million Euros and established the HBIS Group Serbia. Both sides highly agreed on one clause that is to keep the jobs of all 5,000 employees.

However, HBIS Group suffered skepticism and sarcasm because of this acquisition: “Why acquiring such an old foreign factory with a yearly loss of 120 Million euros for seven consecutive years?”, “What is the point of this acquisition, given such low technical level and extremely backward production capacity?”.

Executive Director Song Sihai, Deputy General Manager Wang Lianxi, Chief Operating Officer Wei Dongming, Chief Financial Officer Tang Juan and others formed a “Super Steel Team” of 9 people and went to Serbia. When they stepped into this century-old steel Mill for real, however, the overall condition of the Mill was the least expected: Obsolete equipment in the 1970s, hardly seen in China, factory almost shut down and depressed staff.

However, one detail in cold rolling shop excited Executive Director Song Sihai. He saw the Serbian workers producing steel plate with a thickness of 0.14 mm with an old rolling Mill in 1970s. The steel plate is almost as thin as a piece of A4 paper, and the production of such a thin plate was never an easy job even with the world’s most advanced production lines.

At that moment, he was deeply moved by the craftsmanship of Serbian. It was also at that moment, he was even firmly believed that acquiring this steel Mill was not a bad deal.

Europe is the birthplace of modern industry, with the most advanced manufacturing industry and most strict operating process. Serbia, located in the center of central and eastern Europe, was not only a key move of HBIS Group’s globalization strategy but also a practical cooperation project under the Belt and Road Initiative.

EXTREMES MEET, THERE IS ALWAYS WAY OUT

They need to quickly overcome difficulties such as different country, unfamiliar people, different language, different human resource management, business model, production technology, laws and regulations, product marketing, financial settlement and so on. However, the most urgent problem to be solved is the technical and equipment upgrading, which is the key to resume production and revival.

Wei Dongming, born in 1970, is a technical “master” with 20 years of experience. As the CEO of HBIS Group Serbia, his suggestions on recycling lump ores and waste residues had not been understood and rejected by the Serbian side.

This gentle but determined man from the city of Tangshan, simply pended this argument and made a calculation on paper. Then he confined himself in the plant and spoke with facts through experiments.

Wei Dongming, who worked till late night every day, had no shifts between on and off duty. His face was always hot because of longtime work in the plant.

The young marketing manager Gao Feng was born in the 1980s. To earn customer trust and take up market share held the key to the profitability of the Steel Mill.

He not only visited customers in large numbers and studied the steel market but also established a cost accounting system. When Gao Feng proposed to “make money on scrap steel”, Serbian managers thought it was impossible. “How can Chinese company do something that US Steel failed to?” However, it was this undefeatable young man who sold out the scrap steel with a monthly output of 1000 tons.

The most admirable was the old sister Tang Juan, who was born in 1968. As CFO, she was facing a financial team with more than 130 people from Serbia, with an average age of 51.

Just imagine the difficulties she was facing, a giant team, language barrier, and different settlement mode. Tang Juan immediately found a major financial issue in less than a month after she took office. Serbian currency Dinar is used in the financial statements while the U.S. dollar is used in the settlement. Due to the exchange rate fluctuation, these two often mismatched. The Serbian financial staff disagreed and replied, “this has been the case for so many years”. However, for the matter of principle, Tang Juan showed her decisiveness and tough attitude, “Sorry, but it has to be changed”.

Deputy general manager Wang Lianxi was known as the “housekeeper” of HBIS Group Serbia. He signed contracts with 5000 employees one by one, purchased new kitchen equipment to improve quality of meals, improved the service of commuting buses, negotiated with worker union and ensured the welfare of workers, visited retired workers, celebrated the birthday for employees and gave gifts to children at Christmas.

Measures with warm and tender feelings have made more and more Serbian workers give thumbs up to Chinese managers. Except for the only 9 Chinese people, the rest of the management team are all Serbian local people.

Employing local people, following local culture and bringing benefits to the local people helped the Chinese team win the respect from the Serbian and make them feel the kindness and resolution of the Chinese team.

On June 20 of 2016, Chinese President Xi Jinping came to HBIS Group Serbia, where President Nikolic and former Prime Minister Vucic warmly welcomed him, joining them were thousands of steel Mill workers and family members lined along the streets.

On the day, President Xi Jinping said to everyone that “home is where one stays”, and encouraged workers to strive to forge ahead and improve the comprehensive competitiveness of Steel Mill so that the Steel Mill will bear early-harvest fruit and benefit the local people.

STEEL SYMPHONY PLAYED ON DANUBE RIVER

HBIS Group did not hesitate to invest in capital and technology, and sent 11 teams, more than 200 people to the Steel Mill for equipment upgrades and technical modifications. HBIS Group Serbia takes full advantage of its own global market network to provide large raw material support for steel Mills and international market sales guarantee. After the HBIS Group took over only half a year, at the end of 2016, Smederevo Steel Mill ended seven years of losses, and created a historical miracle that turned losses into profits.

2016 is the eighth year after the global financial crisis. The storm has swept the whole world. However, HBIS Group in Serbia, which is far away, created “Spring in the harsh winter”. The spring breeze blows green on the Danube River. Most directly benefiting are more than 5000 employees who once almost lost their job.

After HBIS Group took over, the employees’ income was stable, and they used their savings and loans to buy their favorite holiday house. Unlike in the past when employees could not even make ends meet, they are now paid on time and even have a bonus. Their income is growing higher and higher. Steve Poyan, 37-year-old, is the blast furnace duty manager. His father and brother are also company employees. He said that before HBIS Group took over, life for him was gray and worries weighed on his heart every day.

But now, production is in full swing every day. He said excitedly, “China is here, HBIS is here, helping our factory get rid of the crisis and regain its vitality, enterprise competitiveness has improved, our income has increased. There are more opportunities for promotion. We can plan the education for our children, family medical care and travel. These were unimaginable in the past. China is amazing! HBIS is amazing!”

The steel Mill enjoyed a rebirth. Smederevo said goodbye to the gloomy atmosphere and has become a city full of energy. Shopping malls, restaurants, bars, cinemas have had more customers.

The Steel Mill is alive. Smederevo City’s fiscal revenue rose from 2 Million euros to 5 Million euros. Urban environment, education, and healthcare all improved.  Today’s Smederevo has not only the highest employment rate but also has the top birth rate in Serbia.

While the company is developing rapidly, HBIS Group also consciously took upon the social responsibility that should be fulfilled. In the past three years, HBIS Group invested more than 1 Million US dollars in local road construction, village water supply, offering condolences to children of the military family, and donating to school…

With the expanded fame of HBIS Group, A “Chinese hit” is like a spring breeze. The entire city witnessed a popular trend in Chinese learning. Ms. Visna, who works in a steel factory, has a beautiful daughter who is a Chinese fan. She won the championship in the Chinese contest, Got the chance to participate 40-day summer camp in China.

A century-old factory, a city of 100,000 people, They and nine “Iron Man” from China, came together and created a world miracle of “1+9=100000”.

HBIS Group Serbia has not stopped moving forward. In 2017, it produced 1.473 Million tons of steel with sales income of 740 Million US dollars, the highest in history; In 2018, HBIS Group Serbia produced 1.769 Million tons of steel, with sales income of 1.06 billion US dollars, which created unprecedented benefits. The company has become the largest export company in Serbia.

An energetic, green and efficient HBIS Group Serbia is rising at the beautiful Danube River. Chinese and the Serbian people created together this world miracle, which has become a dazzling star along the “Belt and Road”.

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