Baosteel doubles down on premiumization, smart and green production

Baosteel, China's leading steel manufacturer, is optimistic about its performance and profitability this year, doubling down on its "high-end, smart and green" strategy to cater for the rising demand from electric vehicle manufacturers, according to a senior executive.

Bao Ping, chief engineer of Automotive Plate Technical Services at Baosteel Group, which is based in Shanghai, highlighted that despite the domestic steel industry's weak performance since the latter half of 2022, the company has maintained its position at the top in terms of total profit and outperformed its competitors last year.

The sector has been struggling with low downstream demand and supply pressures.

In the first quarter of 2024, Baosteel reported a total profit of 2.79 billion yuan ($385 million), maintaining its leading position in the domestic market. For the entire year of 2023, the company achieved a total profit of 15.09 billion yuan.

Baosteel's growths in international market this year have also fueled its performances, with export order volume exceeding 1.5 million metric tons in the first quarter of 2024.

The company's commitment to building a high-end, smart and green production chain plays a pivotal role in its resilience and continued profitability, according to Baosteel.

In terms of its premiumization strategy, differentiation serves as a core competitiveness, said the engineer.

This strategy is built around a specialized portfolio family that highlights automotive panels and silicon steel, alongside a range of differentiated products.

In 2023, Baosteel achieved a sales volume of 27.92 million tons within this portfolio, up 10 percent year-on-year. Sales of cold-rolled automotive sheets surpassed 9 million tons, setting a new record.

Last year, the group's research and development investment reached 5.68 percent of total revenue, with new trial products accounting for 37 percent of sales, a 4.8 percent year-on-year increase. Baosteel had 10 global product launches in 2023.

On the technological front, Baosteel continues to advance its smart production capabilities. The company introduced 15 new systems, including a digital R&D platform, smart management and smart marketing.

The smart factory initiative has seen the addition of nearly 50 new intelligent production lines and the deployment of over 200 robots, significantly enhancing production efficiency, he said.

"We have positioned 2024 as the first year for Baosteel to promote its AI strategy," said Bao. On April 26th, the company signed a cooperation agreement with Huawei, and launched its computility center.

"We will rely on cloud computing and the new generation of AI technology to boost the transformation and implementation of AI," said Bao.

Baosteel's efforts of environmental sustainability have also yielded significant achievements, said the company. The company made strides in ultra-low emission transformation last year, with its Dongshan and Baoshan bases receiving the Performance A-level Enterprise Award for 2022.

Additionally, Baosteel has completed the construction of the industry's first carbon management information system. This system enables scientific management and certification of carbon footprints and carbon assets. The company also increased its participation in green electricity trading, ranking second in the 2023 China Enterprise Green Electricity Trading Ranking.