Chapter 65 Chapter 17 Iron Book: Death of Steel

Dai Guofang's idea of ​​building a large iron and steel plant burst out suddenly in the spring of 2002.At this time, the 39-year-old was pacing up and down the long embankment on the south bank of the Yangtze River, like a child who had found a treasure. This is a bitter child who grew out of wormwood. He was born in a small village called Dunan Village in Changzhou City, Jiangsu Province. At the age of 12, because my family was too poor, I had to drop out of school to make a living.His first job was picking up scrap metal.With the development of the model economy in southern Jiangsu, many small and medium-sized manufacturing enterprises have been set up in Changzhou. Dai Guofang goes to pick up and buy scrap copper and iron near the factories every day.Although he did not receive much education, he seemed to have a special talent for doing business. After saving a little money, he went to buy a walking tractor, so that the radius of acquisition was much larger at once; not long after, He also bought back a briquetting machine, and pressed the collected scrap iron into iron blocks, which could be sold at a higher price.

For quite a long time after the reform and opening up, energy shortage has always been the biggest bottleneck plaguing enterprises in the Yangtze River Delta. Because of this, the growth of the steel industry has been relatively good. Around 1984, Dai Guofang set up a piece of land next to her old yard, and set up a steelmaking workshop called Sanyou Roll Factory.He purchased several obsolete second-hand converters and iron furnaces from state-owned enterprises such as the Shanghai No. 3 Iron and Steel Works, forming a simple industrial chain.After accumulating a certain amount of experience in steelmaking, Dai Guofang went to a place near Changzhou to contract the workshops of some state-owned steel factories that were on the verge of bankruptcy.It was an era when the system determined efficiency. Once the lifeless steelmaking workshop in the hands of the director of the state-owned enterprise was transferred to Dai Guofang's hands, it immediately became a money-making machine.At most, there were as many as five contracted workshops under his name.

In 1996, Dai Guofang registered and established Jiangsu Tieben Cast Steel Co., Ltd. with a registered capital of 2 million yuan. The meaning of "iron base" is to start with iron and never leave the industry.Around 2000, Tieben's factory area expanded to 18 hectares, with more than 1,000 workers and sales revenue exceeding 100 million yuan.However, the scale of the factory is still relatively small, the technical level is very low, and the products produced are all low-grade products such as rolls and continuous casting slabs.In order to take Tieben to a new level, Dai Guofang decided to go bankrupt and invest in the blast furnace project, because only in this way can he escape from thousands of small steelmaking factories. Three years later, when Tieben's blast furnace project was completed, Dai Guofang knelt down in front of the blast furnace chief in front of thousands of workers, tears and sweat mixed together.This year is the year when Tieben took off. The annual steel output soared to 1 million tons, and the sales revenue exceeded 2.5 billion yuan.In that year's "New Fortune" "China's 400 Rich List", he ranked 376th, with an estimated asset of 220 million yuan.

During the construction of the blast furnace project, a bigger dream rose in Dai Guofang's heart. After 2001, with the sustained and rapid growth of the macro economy, various energy sources were in short supply, among which steel and electricity were the two most in short supply.In the steel market, whether it is wire or plate, ordinary steel or special steel, the price generally continues to rise, almost to the point of "one price a day".At the gate of Tieben Factory, large trucks from all over the country lined up in a long queue, waiting to pick up the goods. Such a scene appeared every day.According to Dai Guofang's estimation, China's steel boom can last at least 5 to 6 years, which should be a once-in-a-lifetime big market for steel people.

Dai Guofang chose the location of the new factory in a long and narrow coastal area along the Yangtze River.In the middle and lower reaches of the Yangtze River, there is a very prominent steel corridor. From west to east, Wuhan Iron and Steel in Hubei, Jiujiang Iron and Steel in Jiangxi, Maanshan Iron and Steel in Anhui, Nanjing Iron and Steel in Jiangsu, and Baosteel Group in Shanghai stand side by side like giants. All of them are among the "Top 100 Industrial Enterprises in China".Dai Guofang, who hadn't even finished elementary school, wanted to build her future iron foundation by the side of these big bosses of the national brand.

Tieben's new construction plan has received strong support from the Changzhou Municipal Government.Changzhou, together with Suzhou and Wuxi, is called "Suxichang", and is the origin of the Southern Jiangsu model.Small and medium-sized enterprises here are very developed and active, but compared with Suzhou and Wuxi, large enterprises are short-legged. Around 2001, Changzhou's growth rate of social fixed asset investment has been ranked first in Jiangsu, but its GDP can only rank sixth among the province's 13 provincial cities.Hungry Changzhou needs an outsize investment to fill the embarrassing gap for those in power.In the municipal government reports of those years, "the whole city will work together to focus on investment, launch projects, increase stamina, speed up the construction of large enterprises and large projects, and strive to achieve new breakthroughs in total investment and project scale." It is a very urgent development strategy that must be mentioned.At this time, Tieben was already a large enterprise in Changzhou City, ranking second in the city in paying profits and taxes. As soon as Dai Guofang's idea was put forward, the city government immediately responded.Everyone knows that iron and steel is an industry with a large investment and a large output. Tieben's dream suddenly became the dream of the Changzhou Municipal Government.

In the eyes of many officials in Changzhou, Dai Guofang is a trustworthy person.He has a thin face, taciturn, and has no hobbies in his life. He just nests in the factory all day long, discussing with technicians.He is a well-known "five no bosses" in the local area - he does not take luxury cars, does not enter entertainment venues, does not eat and drink, does not gamble, and does not even live in high-end hotels. He lives very frugally on weekdays and invests all his family savings in In the factory, my father and stepmother have been growing vegetables and farming in the countryside.His family lived in a very simple small house in the steel factory. One wall of the house was hit by a big truck and he didn't care.The car he drives all the year round is a foreclosed Santana 2000. Even after becoming a billionaire on the rich list, he still remains frugal.

At the beginning, Dai Guofang's vision was not as ambitious as later. In May 2002, he put forward a plan to build a new factory with a little more than double the current production capacity. Its main construction is two blast furnaces and a 14-meter-deep deep-water wharf, covering an area of ​​2,000 mu, with an annual output of 260 The total investment of the 10,000-ton wide and thick plate is about 1 billion yuan, mainly with self-owned funds. However, driven by the enthusiasm of the relevant people, the Tieben project has been revised and expanded day by day.In just 6 months, the scale of the project has increased from more than 2 million tons at the beginning to 4 million tons, 6 million tons, and finally set at 8.4 million tons, and the scale has climbed from 2,000 mu to 9,379 mu, the project estimate is an astronomical 10.6 billion yuan, and the products are positioned as higher-end products such as marine plates and rebar.

At that time, Tieben had fixed assets of 1.2 billion yuan and net assets of 670 million yuan.To launch a project exceeding 10 billion yuan with such a capital scale is undoubtedly a "small horse-drawn cart".Dai Guofang said to his subordinates: "With so much support from the local government, where can I find such a good opportunity?" After confirming the information of government support, the local bank boldly lent money to Tieben, so Tieben received 4.399 billion yuan at once. RMB bank credit. It is very difficult for a private enterprise to start a steel project with an investment of tens of billions of yuan and an area of ​​nearly 10,000 mu to obtain approval from the relevant central authorities.China's iron and steel industry is a semi-monopoly industry with entry barriers. According to relevant regulations, projects with an investment of more than 30 million US dollars must be reported to the National Development and Reform Commission for approval. The chances are also very slim.

China's economic reform has always had a tradition of "passing through barriers". The so-called "go fast when you see a green light, and go around when you see a red light". In this process, Shao fell sadly and became a typical example of breaking the law.This gap between reform and development and system design has become a gray phenomenon throughout the history of Chinese enterprises. ①Changzhou people also tried to "break through" in the iron project.People have a fluke mentality that once hundreds of millions or even billions of dollars are invested, can it be impossible to let the child who has already been born be stuffed back into the mother's stomach?

As a result, Tieben’s 8.4 million tons project was split into 7 sub-projects and 1 wharf project to be reported separately. Tieben accordingly established 7 “Sino-foreign joint ventures” with names in name only. The land was "divided into parts" and divided into 14 pieces of land for approval.The Economic Development Bureau of Changzhou High-tech Zone, where the project is located, quickly approved all infrastructure projects within one day.Dai Guofang later told reporters who came to interview in the detention center: "All the procedures at that time were handled by the government, and we didn't go to ask about these things. When the government said it could be moved, we started working." If the Tieben project has not been forcibly suspended, Changzhou's "passing through the gate" will become another wonderful case of government departments actively supporting the bold development of private enterprises. With the full support of the government, Dai Guofang devoted all her energy to the feasibility of the project. Although the iron and steel industry is an industry with large imports and outgoings on the surface, the secret of its profitability is still the art of controlling scale and cost. Andrew Carnegie discovered such principles in a genius way more than 100 years ago while building his steel empire.He said: "The low price is directly proportional to the scale of production. Therefore, the larger the scale of production, the lower the cost... Reduce costs, seize the market, and run at full capacity. As long as the cost is well controlled, the benefits will naturally come. " Dai Guofang has not read Carnegie's book, but he followed the "Carnegie Principles" to the letter. The scale of 8.4 million tons is enough to make Tieben one of the largest steel companies in China. At that time, there were only two steel plants with more than 10 million tons in the country, Baosteel and Tangshan Iron and Steel.Dai Guofang hired many top iron and steel experts to participate in the demonstration and positioning. In terms of technology, from forging and iron making to sintering and coking, the most advanced equipment in the country is used. The blast furnace adopts a 120-ton blast furnace permitted by the state. Like almost all fields, private steel companies have always had a cost advantage.According to some data, the ironmaking cost of private enterprises is 60 to 90 yuan per ton lower than that of state-owned enterprises, the cost of steelmaking is 60 to 150 yuan per ton lower, and the cost of finished products is 100 to 300 yuan per ton lower.Therefore, Dai Guofang said: "It's like building a house at home. If you buy a ready-made house, it is very expensive. If we buy materials to build it ourselves, it will be 50% cheaper. We only need 3 blast furnaces. More than 100 million, while others want 700 million or even 800 million." In order to form a long-term cost advantage, Dai Guofang also reached a long-term iron ore supply agreement with an Australian company, which is much cheaper than the market price.At that time, his agreed price was more than 300 yuan per ton, while the market price was around 1,000 yuan per ton, and this price remained unchanged for a long time. Dai Guofang's investment measures, coupled with the continued high temperature of the steel market, made almost everyone optimistic about this project.Dai Guofang herself is also full of confidence.He told the Jiangsu media reporters who came to interview: "Tieben will surpass Baosteel within three years, and catch up with Posco within five years." third.