A worker of HeSteel Group Co Ltd's subsidiary checks steel plats for high-end automobile in Tangshan, North China's Hebei province, Feb 19, 2014. (Photo/Xinhua)
Zhang Jiwen almost lost his job when a furnace he worked at for many years was demolished at Xuansteel, a subsidiary of HeSteel Group Co Ltd, in northern China's Hebei province.
But thanks to his determination to adapt, Zhang secured the necessary training for new skills and instead became a quality inspector at the company's technology center.
Zhang's pathway to a new career is a small part of a bigger picture: the supply-side structural reform measures carried out by HeSteel, China's leading iron and steel business group.
From 2016 to 2017, HeSteel wants to cut its annual iron capacity by 2.6 million tons and steel capacity by 5.02 million tons.
Demolishing the Xuansteel furnace was the first step in HeSteel's move to trim its overcapacity.
It was once the company's top producer, able to produce 1,500 tons of iron per day.
With its demolition, HeSteel cut annual iron capacity by 520,000 tons.
"Cutting overcapacity is the first important step to reform," said HeSteel Group chairman Yu Yong. He added that the restructuring would help enhance the group's competitive abilities.
In the past, HeSteel, like the other steel companies, focused on the quantity of output in order to meet the great demand for steel products, most of which were low-end ones used in infrastructure construction.
But HeSteel has now switched to manufacturing high-grade steel products and other high-end products, such as steel sheets for automobiles and home electrical appliances.
In the first half of the year, high-grade steel products accounted for just over half of HeSteel's total output, according to data provided by the group.
The group produced 5.36 million tons of high-end products during the same period, increasing 121 percent from the same period of last year.
On the flipside, output of crude steel and plain-carbon steel products was reduced by 11.33 percent and 9.16 percent, respectively during the first four months this year.
By the end of 2020, 70 percent of HeSteel products will be high-grade steels, the group said.
While upgrading its steel products, HeSteel is also fostering new driving forces by developing its non-steel business. These include logistics, trade, equipment manufacturing, healthcare and social services.
By the end of 2020, the non-steel business in HeSteel is expected to generate 3.5 billion yuan ($526 million) of profit for the year, contributing about 35 percent of the group's total earnings.
According to the Hebei Bureau of Statistics, iron and steel is no longer the Hebei province's top industry.
In the first half of this year equipment manufacturing replaced iron and steel as the province's number one industry. Its added value increased 134.86 billion yuan ($20.32 billion) year on year during the period.
