Ser­bia suc­cess boosts HBIS ex­pan­sion

Steel-maker turns around sick mill quickly with good man­age­ment

China Daily (Hong Kong) - - BUSINESS - By ZHANG YU in Shi­ji­azhuang zhangyu1@chi­nadaily.com.cn

Af­ter a year of imag­i­na­tive man­age­ment, HBIS Group of China has suc­ceeded in turn­ing around the trou­bled Smed­erevo steel mill, Ser­bia’s largest, re­in­forc­ing the view that the con­glom­er­ate’s go-global strat­egy is yield­ing pos­i­tive re­sults.

He­bei-based HBIS, one of China’s largest iron and steel man­u­fac­tur­ers, bought an ail­ing, loss-mak­ing Smed­erevo for 46 mil­lion euros ($51.5 mil­lion) in April last year and started to man­age it in July.

The takeover ended seven years of losses and the 105year-old Smed­erevo, which has since been re­named HBIS Group Ser­bia Iron & Steel D.O.O, was back in the black by the end of last year, said its CEO Song Si­hai.

“It had taken only half-year for HBIS Ser­bia to turn a loss into a profit,” said Yu Yong, chair­man of HBIS Group.

HBIS Ser­bia’s out­put in the sec­ond half of last year in­creased more than 50 per­cent from the first half, reach­ing the high­est level since 2010.

Be­sides, in the same pe­riod, the out­put of high value-added cold-rolled sheets rose by 112 per­cent.

With its world­wide sales net­work, HBIS Group has opened up new mar­kets like the US, Egypt, Turkey, Ger­many and Italy for its Ser­bian unit. In the sec­ond half of 2016, the mill was the sec­ond largest ex­porter in Ser­bia.

The dra­matic turn­around was brought about by sus­tained ef­forts. Since the takeover, HBIS has sent nearly 200 Chi­nese per­son­nel to deal with the prob­lems of then Smed­erevo re­lat­ing to mill man­age­ment, fi­nance, equip­ment, tech­nol­ogy and crafts­man­ship.

“The big­gest change for me is that I don’t re­ceive an­gry calls from sup­pli­ers any more,” said Subotic Žarko, 41, di­rec­tor of the ma­te­ri­als man­age­ment depart­ment at the Ser­bian mill. He has been work­ing at the mill for 13 years now.

He said it was hard for the mill to get all the ma­te­ri­als needed be­cause it had no sta­ble fi­nances, and didn’t pay sup­pli­ers reg­u­larly be­fore the takeover by HBIS.

Staff like him used to worry about their fu­ture. “Young col­leagues de­layed their plans for wed­dings and buy­ing new houses, be­cause they didn’t know if their next salary was go­ing to come and if they could re­pay bank loans,” Zarko said.

Af­ter the takeover, how­ever, things im­proved. “I didn’t spend time on daily prob­lems any­more, but fo­cused on pre­par­ing ideas and projects for the fu­ture,” he said.

Ac­cord­ing to Zarko, HBIS Ser­bia started to forge longterm con­tracts with sup­pli­ers in place of short-term and one-off ones. “That makes sup­ply and price sta­ble,” he said.

Lazic Polina, who works at the mill’s fi­nance depart­ment, vis­ited HBIS’ sub­sidiary in Tang­shan, He­bei, in June. She said she hoped one day the Ser­bian mill will thrive like HBIS.

“We’re grate­ful to HBIS for bring­ing new hope to the 5,000 work­ers at the steel mill, in­clud­ing my­self,” she said, adding that HBIS’s ef­fec­tive man­age­ment has ben­e­fited com­mon peo­ple like her.

Their salaries have in­creased by an av­er­age 10 per­cent from the pre-ac­qui­si­tion level, she said.

Yu said HBIS Group would make the Ser­bian steel mill com­pet­i­tive in both Euro­pean and global mar­kets.

HBIS will in­vest $120 mil­lion to strengthen the steel mill with new equip­ment and tech­nol­ogy this year, ac­cord­ing to Xin­hua News Agency.

“Suc­cess in for­eign in­vest­ment means win-win for ev­ery­one con­cerned,” Yu said.

HBIS Ser­bia said it re­spects lo­cal cus­toms and cul­tural tra­di­tions, and does not lose sight of them while in­tro­duc­ing ad­vanced tech­no­log­i­cal and man­age­rial ex­per­tise in the com­pany.

Among its em­ploy­ees, only 15 are Chi­nese, which re­flects HBIS’ pol­icy of re­ly­ing on lo­cal tal­ents.

But the Ser­bian unit is a small part of HBIS’ global op­er­a­tions. It has other sub­sidiaries in South Africa, Aus­tralia, Mace­do­nia and the US.

Ac­cord­ing to the group, its over­seas as­sets are worth $6 bil­lion and the sub­sidiaries em­ploy 12,000 work­ers in all. Last year, over­seas mar­kets con­trib­uted nearly one-third of HBIS’ to­tal sales.

We’re grate­ful to HBIS for bring­ing new hope to the 5,000 work­ers at the steel mill, in­clud­ing my­self.” an em­ployee at the HBIS’ Ser­bian steel mill

Chi­nese and Ser­bian em­ploy­ees of HBIS Group work to­gether in HBIS Group Ser­bia Iron & Steel D.O.O in Ser­bia.

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