Luo Bingsheng, board chairman of the leading iron and steel producer in China, said 2002 is "very crucial" year with both challenges and opportunities ahead.

As this is the first year since China's WTO entry, many heavyweight iron and steel multinationals such as POSCO from the Republic of Korea and Japan-based Nippon Steel will double their efforts to increase their presence in China, Luo said.

With China gradually phasing out the import quota system on steel products, Luo predicted domestic iron and steel companies have fierce market competition ahead.

To survive the challenges ahead, the management of the Shougang Group has mapped out three developing strategies for this year, hoping to build up its strength quickly.

Luo said that they will reorganize the group by investing in new high technology to update the current product mix, will explore new growth areas by branching out into high-tech-related sectors and expand their business abroad to seek financial backup and other support for possible strategic adjustment.

Taking market accession as a two-way deal which also brings positive impacts to indigenous companies, Luo said that his group will learn from overseas counterparts and wholeheartedly join the world competition.

According to Luo, the company has already started transnational operations with a number of subsidiaries being established abroad.

Of all the company's steel products, twisted steel and wire rod sell best on the world market. In Japan and the Republic of Korea, these two products each fetch two or three hundred yuan more than on the domestic market, Luo said.

To maintain its position as one of China's leading iron and steel giants, the company is constantly expanding its high-tech business lines to software, information technology and other tech-intensive final products.

In 2001, the company's strategic adjustments were well rewarded.

About 18.4 billion yuan (US$2.22 billion) came from non-steel high-tech products, more than 50 percent of the country's total sales.

Sales in commercial housing development stood around 235 million yuan (US$ 28.3 million) and sales of industrial robots climbed 48.2 percent in 2000.

Meanwhile, the company also contracted a number of urban construction projects in Beijing, with the contracted value topping two billion yuan (US$241 million).

In 2001, the company raked in a profit of 450 million yuan (US$54.2 million), up 13.92 percent over 2000.

As China continues to open up its market, Luo said that the Shougang Group will strive to take the opportunities provided and improve both technical innovation and structural reform.

(China Daily January 9, 2002)