Smederevo Steel Factory in Serbia, with its difficult road to survive since the 21st century, has witnessed the arrogance and decline of American companies and the rise of China's industrial strength.
This steel mill was originally the largest steel mill in Serbia. After a century of vicissitudes, it was on the verge of bankruptcy. In 2002, the US steel company acquired it for US$33 million, confidently trying to bring it back to life.
However, the US Steel Company has not turned losses into profits for 49 years, but has become more and more debts.
pictures are from the Internet
As a result, the United States did not want to continue operating for a day. After hastily negotiations, it sold it to the Serbian government for $1.
Later, China Steel Enterprise Hesteel Group acquired the steel mill for 46 million euros, and it turned it into profits in less than a year. A few years later, it became the most powerful steel mill in Serbia.
Smederevo Steel Plant was once the largest steel plant in Serbia for nearly a hundred years, but why did it become on the verge of bankruptcy?
After 9 years of failed operations in the United States, how did China bring this steel mill back to life?
Why did the century-old factory decline?
Although Serbia is not vast in territory, it has the awareness of keeping up with the trend of development of the times. At that time, the Serbian government followed the footsteps of the industrial revolution and founded this Smederevo Steel Factory in 1913.
Picture source from the Internet
With the hard work and wisdom of the Serbian people, the steel mill has grown bigger and bigger until it became Serbia's largest steel mill. Even after experiencing the first war and World War II , the steel mill has always stood firm.
However, as countries around the world quickly entered modernization, the development pace of Serbian steel mills gradually became increasingly different from that of the world's advanced steel mills.
plus the various global financial crises that were later experienced, steel mills became even more unsustainable.
In July 2002, Serbia's largest steel mill, which had existed for 99 years, officially declared bankruptcy.
pictures are from the Internet
The news caused a lot of sensation in its country, which means that a behemoth collapsed for all the people.
The entire steel mill has more than 5,000 employees and has huge workshops and factories. Under normal circumstances, the annual steel output was 2.2 million tons. Once the production was completely stopped and all workers were disbanded, it would inevitably have a significant impact on society.
Not only will the business of many companies related to steel mills be affected, but the whereabouts of laid-off workers will also become a major problem. Although
will have various impacts, declaring bankruptcy is also a helpless move.
pictures are from the Internet
. In order to minimize the impact of steel mill bankruptcy on the country, Serbian government personnel have a mentality of being a living, looking for companies willing to take over this large steel mill in the international community, hoping to find a way for Smederevo Steel Plant to resurrect.
Americans came to Serbia with confidence
At this time, the American Steel Company noticed this steel mill. While the United States is developing hegemony around the world, its capital tentacles have also been working hard to extend to all parts of the world.
plus EU and the United States have many cooperative relationships. Therefore, after inspecting the steel mill, the US Steel Company expressed confidence that it was willing to acquire the bankrupt steel mill.
American Steel Company
This is exactly what the Serbian government is happy to see, so it immediately signed a contract and sold the factory to American Steel Company for $33 million in 2003 the second year after the Smederevo Steel Plant declared bankruptcy.
US Steel is rich and powerful, and thinks it has strong funds as support. It is not difficult to bring this century-old steel mill back to life.
With the support of the US Steel Headquarters, various new instruments and equipment were opened into the steel mill. Managers at all levels were sent from the United States to Serbia, and each of them looked confident.
They thought that just like opening a chain shopping mall, copying the local steel mill business model to Smederevo Steel Factory in Serbia, they could use the power of capital to revitalize the steel mill.
But Americans' arrogance eventually led them to failure.
American Steel Company
This steel mill not only did not resurrect from the operation of American Steel Company, but instead suffered repeated setbacks on various problems that have emerged one after another. Before the road to rise has begun, it has gone downhill in the mud.
Under the years of operation of the American Steel Company, the steel mill not only did not turn losses into profits as expected, but instead owed more and more money and became heavily in debt due to losses year after year.
The American Steel Company itself also hopes to make money through this steel mill, so after consultations from senior management, they decided to continue to try their business, and they have been operating for 9 years.
picture source from the Internet
What makes them even more distressed is that this steel mill not only cannot make money, but also in order to maintain the operation of the factory, the US Steel Company also has to pay a certain amount of funds every year to pay in.
plus the various debts generated every year have become the bottomless pit that keeps American Steel losing money.
The full confidence that Americans had when they took over this steel mill was now wiped out by years of losses. No one in the American steel company believed that Serbia's century-old steel mill could turn losses into profits.
After continuous discussion, senior executives of the US Steel Company finally made up their minds to give up the Smederevo Steel Plant.
Picture source from the Internet
At this time, this steel mill is already a hot potato for Americans. It feels hot for them to hold it in their hands for a day.
Because they have to pay for more than one day of operation, but they can't make any profit.
There are two ways to give up this steel mill, one is to declare bankruptcy and the other is to resell it directly.
declares bankruptcy requires many procedures, and part of the debt still needs to be paid back by US Steel, which will only lose more for US Steel, so the steel mill was resold as the best choice for US Steel.
Pictures are from the Internet
, but finding a buyer became a difficult task. At that time, no company in the world was willing to take over this steel mill.
After all, the American Steel Company, which has a strong asset, has not turned losses into profits after operating for 9 years. In the eyes of large steel companies around the world, the difficulty of operating this steel mill must be extraordinary.
The American Steel Company had no choice but to use the original owner of the steel mill, the Serbian government, as the first target for sale.
At first, the Serbian government was very reluctant to take over the steel mill again. After all, the factory was in decline under the government's operation. If the government took over again, the future fate of the steel mill would still go bankrupt in almost every 100% of it.
pictures are from the Internet
But the United States does not tell Serbia anything, but directly shows a hegemonic attitude and puts pressure on the Serbian government from a political perspective.
Serbia relies on the cooperation and assistance of the United States in many aspects, and under various pressures from the United States, it has to take over this hot potato again.
. The United States was eager to take action and was tactfully not asking the Serbian government for too much money. It only symbolically demanded one dollar and threw this huge burden to the Serbian government.
took over for $33 million to later took over for $1, and the US Steel Company lost not only the nearly $33 million difference, but also various investments in steel mills over the past nine years.
Picture source from the Internet
In order to maximize the interests, Americans took away all kinds of advanced equipment they had invested before leaving, bringing the production conditions of this century-old steel mill back to 9 years ago overnight.
The Serbian government once again picked up this hot potato. Many officials believe that the US steel company has not operated it, so it seems that the steel mill has reached a point where it must go bankrupt, so the government generally agrees to let the steel mills go bankrupt.
However, many people still refused, especially the more than 5,000 workers in the steel mills were even more opposed. No one was willing to watch the steel mills that they had worked for the rest of their lives no longer existed.
At the call of workers, more and more people hope that the government will continue to actively seek a way out for steel mills.
Picture source from the Internet
In desperation, the government temporarily barely operates the steel mill.
The Serbian government, which was not rich in finance, had no strength to support the operation and development of steel mills, so the government was looking for a next home for steel mills while operating.
In 2014, the newly appointed Serbian Prime Minister Vucic began to continue to pay attention to the development of the Smederevo Steel Plant. He was determined to find buyers for the steel plant himself so that more than 5,000 workers in the steel plant could keep their jobs and even live a better life.
Vucic
How can China turn steel mills into profits in less than a year
At this time, the Chinese steel enterprises that had already risen rapidly attracted Vucic's attention. Vucic found China in 2016. He took the initiative to propose to the Chinese government to sell the Smederevo Steel Plant to Chinese steel enterprises.
my country and Serbia have had a good partnership for many years. In order to examine the feasibility of acquiring Smederevo Steel Plant, my country's largest steel company, Hesteel Group, specially sent people to Serbia for inspection. The results of the inspection of
made both Chinese and Serbian personnel happy. It is completely possible that Smederevo Steel Plant will turn losses into profits. After some negotiations, China Hesteel and the Serbian government finally finalized the price. In April 2016, Hesteel Group bought the steel mill for 46 million euros.
Hesteel Group sent Zhao Jun, Minister of Iron Smelting Department, to lead 8 people to form a leadership team to Serbia to be responsible for the management of this steel plant. All the original Serbian staff and workshop workers at all levels of the steel plant are retained.
The original 5,050 Serbs are looking forward to the 9 Chinese coming to the steel mill to bring the steel mill back to life.
At first, most Serbs were confused. At that time, Americans came with many equipment, but they didn’t manage the steel mill well. Now only 9 people have arrived in Chinese and no equipment has been shipped. Is it really possible?
Leadership Group
Zhao Jun and others did not disappoint the Serbs. In order to improve the operating conditions of the steel mills, they first started from the management level, discovered and solved the problems.
They found that the previous accounts of steel mills were all counted in Serbian currency, while US dollars were used as units during settlement, which made the financial process very cumbersome.
Chinese managers first made rectifications on this issue. Serbian currency is used uniformly for Serbia's domestic sales accounts, while import and export accounts are RMB or US dollars.
In addition, in terms of how to get along with workers, Chinese personnel promote the concept of equality, eat in the same cafeteria with workers, and take public transportation to and from get off work like them. When encountering any problems, they will actively communicate with workers, which makes Serbian workers feel very friendly.
pictures are from the Internet
Basic rectification at the management level has been done, and Chinese personnel immediately began to carry out business rectification.
If you want to turn steel mills into profits, you must start from two aspects: one is to reduce costs and the other is to expand sales.
Chinese personnel first start by reducing costs and inspecting the production process and raw materials. After the inspection of
, Chinese personnel suggested that a certain amount of block ore can be added to the iron ore of the steel mill, which can significantly reduce the cost of raw materials without affecting the original quality of the steel.
At first, the staff of Serbia did not agree because they had never seen this practice. This method is a scientific method that has been used internally in Hegang for many years and has been fully tested by practice. Chinese personnel conducted a careful experimental demonstration for Serbia personnel, which finally convinced the other party.
Image source from the Internet
After making various efforts from these aspects, the operating conditions of Smederevo Steel Plant quickly improved, unnecessary costs were continuously reduced, and operational efficiency was continuously improved.
The workers are full of energy. This century-old large steel mill has regained its vitality and is no longer as lifeless as before.
In less than a year, China Hesteel made Smederevo Steel Plant turn losses into profits, and its turnover continued to rise after that.
Before China took over the steel mill, its annual steel output was less than 1 million tons. In 2018, just two years after taking over, the steel output of the steel mill reached 1.769 million tons.
Picture source from the Internet
While the operating conditions of steel mills are constantly improving, the quality of life of workers is also constantly improving, the sanitary conditions of the canteen are getting better and better, and the food is becoming more and more delicious.
Workers gradually had commuter shuttle buses to and from get off work, and the food, clothing, housing and transportation of more than 5,000 people working in the steel mill have become more and more orderly.
Today's Smederevo Steel Factory has not only come back to life, but has also become the largest steel factory in Serbia's strength.
The steel mill that Americans failed to turn losses into profits in 9 years, and the Chinese managed to do it in less than a year, which made Americans feel ashamed.
Picture source from the Internet
This steel mill not only allowed more than 5,000 Serbian staff to live a happy and secure life, but also created an income for China Hesteel Group, and became a symbol of friendship between the peoples of China and Serbia with a win-win business project.
They thought that just like opening a chain shopping mall, copying the local steel mill business model to Smederevo Steel Factory in Serbia, they could use the power of capital to revitalize the steel mill.
But Americans' arrogance eventually led them to failure.
American Steel Company
This steel mill not only did not resurrect from the operation of American Steel Company, but instead suffered repeated setbacks on various problems that have emerged one after another. Before the road to rise has begun, it has gone downhill in the mud.
Under the years of operation of the American Steel Company, the steel mill not only did not turn losses into profits as expected, but instead owed more and more money and became heavily in debt due to losses year after year.
The American Steel Company itself also hopes to make money through this steel mill, so after consultations from senior management, they decided to continue to try their business, and they have been operating for 9 years.
picture source from the Internet
What makes them even more distressed is that this steel mill not only cannot make money, but also in order to maintain the operation of the factory, the US Steel Company also has to pay a certain amount of funds every year to pay in.
plus the various debts generated every year have become the bottomless pit that keeps American Steel losing money.
The full confidence that Americans had when they took over this steel mill was now wiped out by years of losses. No one in the American steel company believed that Serbia's century-old steel mill could turn losses into profits.
After continuous discussion, senior executives of the US Steel Company finally made up their minds to give up the Smederevo Steel Plant.
Picture source from the Internet
At this time, this steel mill is already a hot potato for Americans. It feels hot for them to hold it in their hands for a day.
Because they have to pay for more than one day of operation, but they can't make any profit.
There are two ways to give up this steel mill, one is to declare bankruptcy and the other is to resell it directly.
declares bankruptcy requires many procedures, and part of the debt still needs to be paid back by US Steel, which will only lose more for US Steel, so the steel mill was resold as the best choice for US Steel.
Pictures are from the Internet
, but finding a buyer became a difficult task. At that time, no company in the world was willing to take over this steel mill.
After all, the American Steel Company, which has a strong asset, has not turned losses into profits after operating for 9 years. In the eyes of large steel companies around the world, the difficulty of operating this steel mill must be extraordinary.
The American Steel Company had no choice but to use the original owner of the steel mill, the Serbian government, as the first target for sale.
At first, the Serbian government was very reluctant to take over the steel mill again. After all, the factory was in decline under the government's operation. If the government took over again, the future fate of the steel mill would still go bankrupt in almost every 100% of it.
pictures are from the Internet
But the United States does not tell Serbia anything, but directly shows a hegemonic attitude and puts pressure on the Serbian government from a political perspective.
Serbia relies on the cooperation and assistance of the United States in many aspects, and under various pressures from the United States, it has to take over this hot potato again.
. The United States was eager to take action and was tactfully not asking the Serbian government for too much money. It only symbolically demanded one dollar and threw this huge burden to the Serbian government.
took over for $33 million to later took over for $1, and the US Steel Company lost not only the nearly $33 million difference, but also various investments in steel mills over the past nine years.
Picture source from the Internet
In order to maximize the interests, Americans took away all kinds of advanced equipment they had invested before leaving, bringing the production conditions of this century-old steel mill back to 9 years ago overnight.
The Serbian government once again picked up this hot potato. Many officials believe that the US steel company has not operated it, so it seems that the steel mill has reached a point where it must go bankrupt, so the government generally agrees to let the steel mills go bankrupt.
However, many people still refused, especially the more than 5,000 workers in the steel mills were even more opposed. No one was willing to watch the steel mills that they had worked for the rest of their lives no longer existed.
At the call of workers, more and more people hope that the government will continue to actively seek a way out for steel mills.
Picture source from the Internet
In desperation, the government temporarily barely operates the steel mill.
The Serbian government, which was not rich in finance, had no strength to support the operation and development of steel mills, so the government was looking for a next home for steel mills while operating.
In 2014, the newly appointed Serbian Prime Minister Vucic began to continue to pay attention to the development of the Smederevo Steel Plant. He was determined to find buyers for the steel plant himself so that more than 5,000 workers in the steel plant could keep their jobs and even live a better life.
Vucic
How can China turn steel mills into profits in less than a year
At this time, the Chinese steel enterprises that had already risen rapidly attracted Vucic's attention. Vucic found China in 2016. He took the initiative to propose to the Chinese government to sell the Smederevo Steel Plant to Chinese steel enterprises.
my country and Serbia have had a good partnership for many years. In order to examine the feasibility of acquiring Smederevo Steel Plant, my country's largest steel company, Hesteel Group, specially sent people to Serbia for inspection. The results of the inspection of
made both Chinese and Serbian personnel happy. It is completely possible that Smederevo Steel Plant will turn losses into profits. After some negotiations, China Hesteel and the Serbian government finally finalized the price. In April 2016, Hesteel Group bought the steel mill for 46 million euros.
Hesteel Group sent Zhao Jun, Minister of Iron Smelting Department, to lead 8 people to form a leadership team to Serbia to be responsible for the management of this steel plant. All the original Serbian staff and workshop workers at all levels of the steel plant are retained.
The original 5,050 Serbs are looking forward to the 9 Chinese coming to the steel mill to bring the steel mill back to life.
At first, most Serbs were confused. At that time, Americans came with many equipment, but they didn’t manage the steel mill well. Now only 9 people have arrived in Chinese and no equipment has been shipped. Is it really possible?
Leadership Group
Zhao Jun and others did not disappoint the Serbs. In order to improve the operating conditions of the steel mills, they first started from the management level, discovered and solved the problems.
They found that the previous accounts of steel mills were all counted in Serbian currency, while US dollars were used as units during settlement, which made the financial process very cumbersome.
Chinese managers first made rectifications on this issue. Serbian currency is used uniformly for Serbia's domestic sales accounts, while import and export accounts are RMB or US dollars.
In addition, in terms of how to get along with workers, Chinese personnel promote the concept of equality, eat in the same cafeteria with workers, and take public transportation to and from get off work like them. When encountering any problems, they will actively communicate with workers, which makes Serbian workers feel very friendly.
pictures are from the Internet
Basic rectification at the management level has been done, and Chinese personnel immediately began to carry out business rectification.
If you want to turn steel mills into profits, you must start from two aspects: one is to reduce costs and the other is to expand sales.
Chinese personnel first start by reducing costs and inspecting the production process and raw materials. After the inspection of
, Chinese personnel suggested that a certain amount of block ore can be added to the iron ore of the steel mill, which can significantly reduce the cost of raw materials without affecting the original quality of the steel.
At first, the staff of Serbia did not agree because they had never seen this practice. This method is a scientific method that has been used internally in Hegang for many years and has been fully tested by practice. Chinese personnel conducted a careful experimental demonstration for Serbia personnel, which finally convinced the other party.
Image source from the Internet
After making various efforts from these aspects, the operating conditions of Smederevo Steel Plant quickly improved, unnecessary costs were continuously reduced, and operational efficiency was continuously improved.
The workers are full of energy. This century-old large steel mill has regained its vitality and is no longer as lifeless as before.
In less than a year, China Hesteel made Smederevo Steel Plant turn losses into profits, and its turnover continued to rise after that.
Before China took over the steel mill, its annual steel output was less than 1 million tons. In 2018, just two years after taking over, the steel output of the steel mill reached 1.769 million tons.
Picture source from the Internet
While the operating conditions of steel mills are constantly improving, the quality of life of workers is also constantly improving, the sanitary conditions of the canteen are getting better and better, and the food is becoming more and more delicious.
Workers gradually had commuter shuttle buses to and from get off work, and the food, clothing, housing and transportation of more than 5,000 people working in the steel mill have become more and more orderly.
Today's Smederevo Steel Factory has not only come back to life, but has also become the largest steel factory in Serbia's strength.
The steel mill that Americans failed to turn losses into profits in 9 years, and the Chinese managed to do it in less than a year, which made Americans feel ashamed.
Picture source from the Internet
This steel mill not only allowed more than 5,000 Serbian staff to live a happy and secure life, but also created an income for China Hesteel Group, and became a symbol of friendship between the peoples of China and Serbia with a win-win business project.
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