Steel of­fi­cial calls for in­tel­li­gent plat­form

China Daily (Hong Kong) - - BUSINESS - By MENG FANBIN meng­fan­bin@chi­

An of­fi­cial has called for up­grad­ing in China’s iron and steel in­dus­try, to take the op­por­tu­nity of the govern­ment’s Made in China 2025 ini­tia­tive.

“An in­tel­li­gent steel in­dus­try plat­form sup­ported by big data can not only help to elim­i­nate over­ca­pac­ity but also op­ti­mize the in­dus­trial struc­ture and in­crease in­dus­try prof­its,” said Gan Yong, pres­i­dent of the Cen­tral Iron & Steel Re­search In­sti­tute and chair­man of the Chi­nese So­ci­ety for Me­tals.

The plat­form is a com­mer­cial ecol­ogy sys­tem jointly built and op­er­ated by sev­eral com­pa­nies, which share re­sources and prof­its, he said.

The aca­demi­cian of Chi­nese Academy of Engi­neer­ing has called for the es­tab­lish­ment of three big data plat­forms in China: the Yangze River Val­ley steel plat­form, the Bo­haiRim steel plat­form and the South­west steel plat­form.

“If a com­pany were on the plat­forms, it could sur­vive. Oth­er­wise, it will die.”

“We have long been talk­ing about in­tel­li­gent pro­duc­tion process within a com­pany, how­ever, in­tel­li­gence in the whole in­dus­try is more im­por­tant,” he said.

“An in­tel­li­gent in­ter­net plat­form is the best and ef­fec­tive way to solve the prob­lems in the pil­lar in­dus­try in China.”

There are many in­di­vid­ual steel com­pa­nies in China, which lead to fierce com­pe­ti­tion and a waste of re­sources, while merg­ers and ac­qui­si­tions be­tween gi­ant cor­po­ra­tions are not easy and may bring huge fi­nan­cial bur­dens, Gan said.

Nor­mally, when the prices are com­par­a­tively high, all com­pa­nies pro­duce a large amount to make more money, which leads to over­ca­pac­ity and plum­met­ing prices.

The phe­nom­e­non is nor­mal in some sec­tors in China, es­pe­cially in cycli­cal in­dus­tries, such as iron and steel, coal and non­fer­rous me­tals, be­cause pro­duc­ers do not know how much should be man­u­fac­tured.

The big data sys­tem solves the prob­lem through ca­pac­ity uti­liza­tion ad­just­ment. Cloud cal­cu­la­tion gives the par­tic­i­pants clear ad­vice on the pro­duc­tion va­ri­ety and spe­cific lev­els of pro­duc­tion, elim­i­nat­ing blind pro­duc­tion and ar­rang­ing out­put ca­pac­ity rea­son­ably, he said.

“Set­ting up in­tel­li­gent plat­forms is a cen­tral course: they join as a group, but they are in­de­pen­dent in fi­nance, man­age­ment and staff.”

Com­pa­nies on the plat­form can co­op­er­ate with up­stream and down­stream firms, as well as for­mer com­peti­tors, he said.

Shar­ing re­sources and in­for­ma­tion in sup­ply-chain, de­sign, man­u­fac­tur­ing and ser­vice, they achieved a win-win sit­u­a­tion, he said. For in­stance, steel com­pa­nies can bar­gain jointly with do­mes­tic and for­eign iron ore providers like in­ter­na­tional gi­ant Rio Tinto and BHP Bil­li­ton, re­duc­ing costs to the low­est level, he said.

The two con­glom­er­ates and Vale of Brazil are the three big­gest iron ore sup­pli­ers in the world, which con­trol the prices of the black metal.

In ad­di­tion, the plat­form can eas­ily re­al­ize in­dus­tri­al­iza­tion for tech­no­log­i­cal achieve­ments, and pro­vide fi­nan­cial sup­port for re­search and pro­duc­tion, said Gan.

“Of course, we still need some time to set up the in­tel­li­gent plat­forms, but steel giants should re­al­ize their ne­ces­sity, fea­si­bil­ity and ur­gency, with ad­vance of the tech­nol­ogy,” he said.

China has al­ready be­come a pow­er­ful coun­try in the global steel in­dus­try, Gan added.

Gan Yong, pres­i­dent of the Cen­tral Iron & Steel Re­search In­sti­tute

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