Baosteel Group Corporation2008 Corporate Social Responsibility Report
Overview
(1) About this Report
This is the first social responsibility report released byBaosteel Group Corporation (hereinafter as“Baosteel”orthe“Company”)tothepublic.
ThereportwascompiledwithreferencetotheGuidelineon Fulfilling Social Responsibility byCentral Enterprises (2008No.1documentofState-ownedAssetsSupervisionandAdministration Commission of the State Council),theGuidetoSustainableDevelopmentReportGRI(G3version),theTenPrinciplesofUNGlobalCompact,andthetheoreticalresearchresultsofBaosteelEconomics&ManagementResearchInstitute,andtheactualconditionsofBaosteel.
(2) Scope
Unlessotherwise specified, this reportmainlydescribesBaosteel’s performance in personnel, community,environment, economy, and supply chain, etc. fromJanuary 1 toDecember 31, 2008, including a summaryof importantevents and tasksbefore2008.The reportcoverssuchbusinesssegmentsasBaosteel’siron&steel,resource development, and further processing of steel(seetheappendixfordetailsonsubsidiaries).
(3) Language and Publishing Form
ThereportispublishedinbothChineseandEnglish.TheChineseversion shallprevail in caseof anydiscrepancybetweenthetwoversions.Intheeventthatanyquestionarisesabout this report,pleasecontactusbyphoneorletteratthefollowingaddress:
CorporateCommunicationDepartment BaosteelGroupCorporation Room 1101, Baosteel Tower, No. 370 Pudian Road,
PudongNewDistrict,Shanghai,P.R.C. ZipCode:200122 Tel:+00862158350000-1129 Fax:+00862168403773 Email:[email protected]
The report is issued in the formof printing, electronicdocumentanddisc,wheretheelectronicdocumentcanbe downloaded from Baosteel’sWebsite (http://www.baosteel.com).
Contents
Chairman’s Message 1
Overview 2
CompanyProfile 2
OrganizationStructure 3
CorporateLeadership 6
CorporateStrategy 8
SocialResponsibilitySystem 9
Stakeholders 10
Employees Performance Report 12
StaffComposition 12
EmploymentOffer 13
Welfare 14
EmployeeSafetyProtection 15
TrainingandEducation 16
LegalRightsProtection 17
Social Performance Report 18
SocialContribution 18
CommunityRelations 21
Compliance 22
Anti-corruption 23
Economic Performance Report 24
EconomicPerformance 24
MergerandReorganization 24
Environmental Performance Report 26
It’sOurDutytoProtectEnvironment 26
ManagementMechanism 27
ManagementMeasures 28
Supply Chain Performance Report 32
GreenProcurementChain 32
EnvironmentallyFriendlyProducts 33
High-QualityService 36
GRI Index 37
Appendix 38
Focuson2008 38
IntroductiontoBusinessSegments 44
Reader’sFeedbackInformationForm 49
1
Chairman’s Message
OnDecember 23rd, 1978, the secondday after the conclusionof the
ThirdPlenarySessionofthe11thCentralCommitteeoftheCommunist
PartyofChina,thefirststeeltubepilewasdrivenfortheconstructionof
BaosteelatBaoshanShanghaionthecoastofEastChinaSea.Eversince
then,Baosteelhassteppedonthesustainabledevelopmentroadtobuild
a“green”Baosteel.
Asthelargestandmostmodernizedsteelcomplexwiththewidestgeo-
graphicreachinChina,Baosteelnotonlydeems“maximizationofinves-
tors’interests”asthegoalforpursuit,butalsotakes“maximizationofthe
long-term value of the enterprise” as themission and considers social
responsibilityasanimportantpartofthecorporatestrategy,inabidto
realizethedualcorporategoalsofwin-winofcorporateeconomiceffi-
ciencyandsocialbenefits.Baosteelactivelycarriesoutthestate’sindustrial
policesforsteelindustry,energeticallypromotesstrategicreorganization
andadjustmentofindustrialstructure,andfullyplaystheexemplaryrolein
enhancingthecomprehensivecompetitivenessofsteelindustry.Fromthe
perspectiveof economy, environment and social harmony,Baosteelwill
carefullythinktherelationshipbetweensocialresponsibilityandlong-term
corporatedevelopment,consideringsocialresponsibilitynotonlyasthe
obligationofanenterprise,butasanimportantopportunityofcorporate
development.
2008isanunusualandextraordinaryyearforBaosteel,inwhichBaosteel
experienced themost severeexternalenvironmentandmostcomplex
situationfordevelopmentsofar.The impactofglobalfinancialcrisis led
todrasticfluctuationsindomesticsteelmarket.Inthefaceofseverechal-
lenge and trial, Baosteel people united as one and fulfilled various so-
cial responsibilities to thebestof theirabilities. Ineconomicaspect, the
mainsteelbusinessscoredsteadydevelopmentwithsubstantialprogress
achievedinZhanjiangProjectandtheofficialunveilingofBaosteelGroup
GuangdongIron&SteelCo.,Ltd.;practicalresultswereregisteredinnew
product R&D andmarket exploration, GO silicon steel was produced
successfully; thecompetitivenessof relateddiversifiedbusinesskeptbe-
ingenhancedandtherestructuringofauxiliarybusinesswascarriedout
steadily,withacompensationmanagementsystemestablishedtofacilitate
the participation of diverse trades in industry competition. In environ-
mentalaspect,Baosteelincreasedtheinputsinenvironmentalprotection
toeffectivelyreducetheemissions,andreceivedthegloryasoneofthe
firstChinese greenenterprises forbenchmarking. In social aspect, after
“5.12”WenchuanEarthquake,onthebasisofrespondingquicklyanddo-
natingmoneyactively,Baosteelbuiltoneafteranotherresidentialquarter
ofcolor-coatedsteelsheetshousingforthedisaster-strickenpeople,and
activelyparticipatedinthepost-disasterreconstructionprojectstofaith-
fullyfulfillitssocialresponsibilities.
The 2008CorporateSocialResponsibilityReportofBaosteelGroupCor-
poration comprehensively introduces Baosteel’s philosophy, system and
practice in implementing its social responsibilities.We have recognized
thepossibilitythattheGlobalFinancialCrisismaydevelop intoaglobal
economiccrisis,whichwillbringrealchallengeofsocialresponsibilityto
enterprises.Only through furtherenhancingour interactivityandcoop-
erationwithinvestors,government,customers,suppliers,employeesand
otherstakeholders,canwesuccessfullyhandle the toughestdifficultyof
theworld.Wewillbringourthoughts intoactions.Thisreportexplicitly
expoundshowwedothings.
Chairman:
2
Amongthe2008FortuneGlobal500companies,Baosteeltookthe259th
place.Baosteelhasbeenonthelistforfiveconsecutiveyears.Accordingto
Standard&Poor’s,Baosteel’slong-termdebtratingin2008was“A-”,with
a“stable”prospect.BaosteelwasselectedbyFortuneMagazineasoneof
“theWorld’sMostRespectedCompanies”from1,500worldwell-known
corporatecandidates.
December23,1978markedthecommencementofBaosteelconstruc-
tion in Shanghai.As the first national key industrial investment project
commencedaftertheconclusionoftheThirdPlenarySessionofthe11th
CentralCommitteeoftheCommunistPartyofChinaandtheimportant
symbol that indicatedChina’smarching intoanewera focusingon the
centraltaskofeconomicconstruction,alongwiththethirty-yearprogress
ofreformandopening-up,Baosteelhasalwaysbeenundertakingthemis-
sionofstridingtowardsapowerfulironandsteelcountry,firmlystickingto
theroadofscientificdevelopment,andmarchingintothearrayofworld
first-classiron&steelmanufacturersinfirmandsoundpaces.
1998witnessedBaosteel’sjointreorganizationwithShanghaiMetallurgical
Holding(Group)CompanyandMeishanIron&SteelGroup.In2006,Bao-
steelreorganizedXinjiangBayiIronandSteelWorks,unveilingthestartof
its cross-regional strategic reorganization. In 2008,Baosteel reorganized
GuangdongIron&SteelGroupCorporationandShaoguanIronandSteel
GroupCo.,Ltd.toestablishBaosteelGroupGuangdongIron&SteelCo.,
Ltd.While eliminating the laggard production capacity, Baosteel actively
preparestoconstructtheZhanjiangManufacturingBase.Theimplementa-
tionand fulfillmentofBaosteel’s strategicobjectives allows it to rapidly
developintothelargest,mostmodernizedandmostcompetitivesuper-
largesteelcomplex,andleapintoaleadingpositionintheworldclassiron
andsteelmanufacturers.
Overview
Inrecentyears,Baosteelhasputemphasisonsteelsupplychain,technol-
ogychain,andresourceutilizationchaintoenhanceintegrationofinternal
andexternalresources,improvethecompetitiveness,andelevatethein-
dustrialposition,andpreliminarilyformedthebusinessstructurecompris-
ingthemainbusinessofironandsteelandrelevantdiversesegments.
Baosteel’smainbusinessisdedicatedtoproducinghighvalue-addedsupe-
riorironandsteelproductswithhightechnologyelements.Ithasanan-
nualsteelproductioncapacityofaround30milliontons,anditsproducts
sellwellinthedomesticandoverseasmarket.Uptonow,ithasdeveloped
threecategoriesofproducts includingplain carbon steel, stainless steel,
andspecialsteel,whicharewidelyusedinfieldsofautomobile,household
appliances,petrochemical industry,machinerymanufacturing,energyand
transportation,architectureanddecoration,metalware,aerospace,nucle-
arpower,electronicsandinstruments,etc.Whileholdingaleadingposition
in thedomesticplatemarket,Baosteel’sproductsarealsoexported to
over40countriesandregionssuchasJapan,Korea,EuropeandAmerica.
The Company attaches great significance to environmental protection,
has cleanproductionpractices, develops recycle economyandpursues
sustainabledevelopment.ItisthefirstenterpriseinChina’smetallurgical
industrytopasstheISO14001certification,andthefirstoneawardedthe
titleof“nationalenvironmentfriendlyenterprise”inChinesemetallurgical
industryandShanghai.
In2004,Baosteel acceded to“GlobalCompact”,beingoneof thefirst
three enterprises to join this treaty in China. In 2006, Baosteel joined
“WorldBusinessCouncil for SustainableDevelopment” (WBCSD), be-
comingthe2nddomesticenterprisewhichjoinedtheorganization,andis
amongthefirstwhojoinedWBCSDintheglobalSteelandIronindustry.
Company Profile
Regarding the main business of iron and steel, Baosteel has developed three categories of products including plain carbon steel, stainless steel, and special steel, which are widely used in fields of automobile, household appliances, petrochemical industry, machinery manufacturing, energy and transportation, architecture and decoration, metal ware, aerospace, nuclear power, electronics and instruments, etc.
3
Organization Structure
O v e r v i e w
Administrative Office with the Board of Directors
Functional department
Business department
Subordinate institution
Adm
inistrative Office
Strategic Developm
ent Dept.
System O
peration Improvem
ent Dept.
Hum
an Resource D
ept.
Assets O
perating Dept.
Finance Dept.
Major Engineering Projects D
ept.
Developm
ent & R
eform D
ept.
Corporate C
omm
unication Dept.
Legal Affairs D
ept.
Auditing D
ept.
Supervision Dept.
Corporate C
ulture Dept.
Safety & G
uardian Supervision Dept.
Brazilian Steel Project Coordination D
ept.
Talent Developm
ent Institute
Zhanjiang Iron & Steel Engineering Project
Headquarters (Preparatory)
Research Institute of Economics & M
anagement
Board of Supervisors
Committees
Deputy General Manager
General Manager
Board of Directors
4
Corporate Leadership
Chairman XuLejiang
DeputyChairman LiuGuosheng
Director HeWenbo
OutsideDirector FengGuojing
LiQingyan
WuYaowen
YangXianzu
XiaDawei
EmployeeDirector WangJinde
Board of Directors
Chairman: XuLejiang Deputy Chairman: LiuGuosheng Director: HeWenbo
5
O v e r v i e w
Outside Director: FengGuojing
Outside Director: YangXianzu
Outside Director: LiQingyan
Outside Director: XiaDawei
Outside Director: WuYaowen
Employee Director: WangJinde
6
Chairman XuLejiang
DeputyChairman LiuGuosheng
GeneralManager,MemberofCPCStandingCommittee HeWenbo
DeputySecretaryofPartyCommittee OuyangYingpeng
DeputyGeneralManager ZhaoKun
DeputyGeneralManager MaGuoqiang
SecretaryofDisciplineInspectionCommission LiuZhanying
DeputyGeneralManager FuZhongzhe
DeputyGeneralManager DaiZhihao
DeputyGeneralManager ZhaoXia
ChairmanofTradeUnion WangJinde
BoardSecretary,ChiefCounsel ChenDelin
Senior Management
Chairman:XuLejiang
Deputy ChairmanLiuGuosheng
General ManagerHeWenbo
Corporate Leadership
7
O v e r v i e w
Deputy Secretary of Party CommitteeOuyangYingpeng
Secretary of Discipline Inspection CommissionLiuZhanying
Deputy General ManagerZhaoXia
Deputy General ManagerZhaoKun
Deputy General ManagerFuZhongzhe
Chairman of Trade UnionWangJinde
Deputy General ManagerMaGuoqiang
Deputy General ManagerDaiZhihao
Board Secretary, Chief CounselChenDelin
8
Baosteeladherestothemissionof“BecomingaWorld-classEnterpriseandSettingupWorld-classLevel
withaFootholdintheMainBusinessofIronandSteel;DedicatedtoBecomingaWorld-classSupplier
ofSteelProducts,TechnologiesandServices”andupholdsthecorevaluesof“Credibility,Cooperation,in
PursuitofMaximizationoftheEnterprise’sValues”.
Baosteelcomprehensivelyadvancesitsleap-forwarddevelopmentbyfollowingitsdevelopmentstrategy
underthenewsituation;directedbytheConceptofScientificDevelopmentandsupportedbytheculti-
vationofsoftpower,Baosteeltakestheroadofnew-typeindustrialization,developscycleeconomy,and
realizesoverallupgradingofscale,structure,technologyandefficiency,aswellasjointdevelopmentofthe
enterprise,theemployeesandthesociety.
TheestablishedstrategicobjectiveofBaosteelis“tobecomeaworld-classinternationalpubliccompany
possessingindependentintellectualpropertyrightsandstrongcomprehensivecompetitiveness,receiving
greatrespect fromthesociety,andboasting‘oneextremelystrong industrial sectorwithconsiderable
developmentofrelevantdiversesegments’”.
Underthenewsituation,Baosteel’sdevelopmentstrategyformainbusinessisoptimizedas“OneMain
Line”,“TwoTransformations”,and“OneUltimateGoal”.
“OneMainLine”istofocuson“scaleexpansion”,themainlineoffuturedevelopment.
“TwoTransformations” refers to the transformationof strategy from“superiorproducts” to“superior
products+scale”,andthetransformationofexpansionmethodfrom“focusingonnewconstruction”to
“combinationofmergerandreorganizationwithnewconstruction”.
“OneUltimateGoal”istoenergeticallyenhanceBaosteel’scomprehensivecompetitiveness,allowitto
lead the development of China’s steel industry. Baosteel will make efforts to fulfill the change from
regionallayouttonationwidelayoutandrealizethebreakthroughininternationallayout,sothatitscom-
prehensivecompetencemayranktop3oftheworldsteelindustry.
“To become a world-class international public company possessing in-dependent intellectual property rights and strong comprehensive com-petitiveness, receiving great respect from the society, and boasting ‘one extremely strong industrial sector with considerable development of relevant diverse segments’”
Corporate Strategy
9
O v e r v i e w
Environmental AffairsEconomic AffairsSocial AffairsEmployee Affairs
CSR Committee
CSR Committee Office
Mainbusinessofironandsteel
Resourcedevelopmentindustry
Steelfurtherprocessingindustry
Technicalserviceindustry
Financialindustry
Productionserviceindustry
VerticallyunderleadershipoftheteamsHorizontallyunderleadershipofthebusinesssegments
Employee Affair Team
Social Affair Team
Economic Affair Team
Environmental Affair Team
In2008,basedon reviewingandsummarizingmanyyears’practiceand
experiencesinfulfillingsocialresponsibilities,Baosteelproposedtheguide-
line of“incorporating social responsibilities into theCompany’s routine
businessactivities”andpreliminarilyestablished theSocialResponsibility
System.
BaosteelhassetuptheCorporateSocialResponsibilityCommittee(CSR
Committee) at topmanagement level, forwhichGeneralManagerMr.
HeWenboactsastheDirector;DeputySecretaryofPartyCommittee
Mr.OuyangYingpengassumestheofficeofDeputyDirector;theleaders
offunctionaldepartmentsandtheheadsofbusinesssegmentsserveas
members.CSRCommittee is the general coordinatingorganization for
theCompany’ssocialresponsibilityaffairsandthespecialcommitteere-
sponsibleforconstructionoftheCompany’ssocialresponsibilitysystem
andworkingmechanism.
TheOfficeofCSRCommitteeissetattheCorporateCommunication
Department,andresponsiblefororganizingthedevelopmentofCSRin-
dexsystem,arrangingthepreparationandissuanceofCSRreports,and
conductingroutineaffairsoftheCommittee.
Fourteamsforenvironmental,economic,employeeandsocialaffairsare
setupbeneaththeCSRCommittee,responsibleforpromotingrespective
fieldsundertheframeworkofSocialResponsibilitySystem,thusforming
amanagement systemwithClassifiedManagement[Note] as focus and
HierarchicalManagement[Note]assupplement.
Furthermore,Baosteelhas setupaSustainableDevelopmentResearch
Center under the Research Institute of Economics &Management, re-
sponsible for researching the national and international environment
protectionpoliciesandagreements,analyzingthedevelopmenttrendand
policyorientationofdomesticandoverseasenergyindustry,andstudying
theCompany’ssustainabledevelopmentstrategy,inordertoprovidefar-
sightedtheoreticresearchfortheCompanytofulfillitssocialresponsibili-
tiesandrealizesustainabledevelopment.
[Note]Classified Management means that the functional departments of headquarters vertically propel the social responsibility tasks for respective divisions of all sub-sidiaries; Hierarchical Management means that each business segment propels their internal social responsibility tasks.
Social Responsibility System
10
On its own initiative, Baosteel undertakes the social responsibility to
promotecoordinationandharmoniousdevelopmentofsocialprogress,
employeedevelopment,economicgrowth,andenvironmentprotection.
Thisismainlyreflectedintheresponsibilitytostakeholderssuchasin-
vestors,customers,suppliers,employeesandthecommunitywithaview
torealizingjointdevelopment.FacingtherequirementofChina’smod-
ernizationconstruction,asChinadevelopsfromalargesteelproducing
countrytoapowerfulone,theCompanytakestheinitiativetounder-
takethesocialresponsibilityasanindustryleaderbychangingtraditional
high-pollution and high energy-consuming steel production modes,
becomingacyclicenterprisewhich integrates ironandsteelproducts
manufacturing, energy conversion, treatment and eliminationof staple
wasteforthesociety,aswellasenergeticallydevelopingenvironment-
friendly products. From the perspective of social, environmental and
economicharmony,Baosteelwillcarefullythinktherelationshipbetween
social responsibility and long-term corporate development, translating
social responsibilities into themomentum of corporate development
andlong-termbenefits.
In theprevious30years,Baosteelhasbeensticking to the“credibility
centric” philosophy, paying close attention to customers’ needs, mak-
inggreateffortstoenhancecustomersatisfaction,andwholeheartedly
trying tomaximize the values for customers; guidedby theprinciples
of“Benefit Sharing, Risk Pooling, andMutual Development”, Baosteel
hasalwaysconsidered“buildingthemostcompetitivesupplychain”as
theultimategoalofsupplierrelationshipmanagement,andestablished
cooperative,win-winandsustainable-developmentstrategicpartnership
withmajorsuppliers;atalltimes,Baosteelhaskeptimprovingtheinves-
torcommunicationplatformtocommunicatewithinvestorsinmultiple
channelsandlayers,andcontinuouslystrengtheningitsservicetoinves-
tors,makingactivecontributionforachievingwin-winresults.
Stakeholders CommunicationMethods Stakeholders’ExpectationsofBaosteel Baosteel’sPractice MajorIndexes
Government,investors(State-ownedAssetsSupervisionandAdmin-istrationCommissionoftheStateCouncil)
Lawsandregulations;Issuanceofpolicydirectives;MeetingsoftheStateandMinistries,andimplementingspiritofthemeetings;Distributionandimplementationofdocu-ments;Regularworkreports;Routinework-relatedcommunications;Reportsandstatements;Visits.
Persistenceinlegitimatebusinessoperationwithhonestyandtrustworthiness;Constantenhancementofsustainableprofitability;Trueimprovementofproductqualityandservicelevel;Reinforcedresourcesavingandenvironmentalprotectionef-forts;Advancementofindependentinnovationandtechnologicalprogress;Guaranteedproductionsafety;Protectionofemployees’legalrights;andParticipationinsocialpublicwelfarecause.
Insistsonhuman-orientedscientificdevelop-ment,responsibleforstakeholdersandtheenvironmentwhilepursuingeconomicef-ficiency,soastorealizetheharmonybetweenenterprisedevelopmentandthesocietyandenvironment.
Salesrevenue;Profit;Tax;Employmentvolume;andValuemaintenance/incrementrateofstate-ownedassets.
Strategicpartners Executionofcontracts;Mutualvisitsandcontactsbetweentopmanagementofthepartners;Regularmeetings.
Achievementofwin-winresultswithBaosteelthroughtightstrategiccooperation.
ExtendsthefieldsanddepthofcooperationasBaosteelexpandsthroughmergerandpurchase.
Salesrevenue;Returnoninvestedcapital;Marketshare;andBrandvalue.
Customers Satisfactionsurvey;Customersymposium;Mutualvisitsbetweenthetopmanagements;Routinecommunications.
Provisionofcontinuallyimprovedqualityproductsandservices. Conductscustomersatisfactionsurvey;andAdoptsthewayof“in-advanceintervention”tosatisfycustomers’needs.
Customersatisfaction;andAwardsgrantedbycustomers.
Employees Labourcontracts;Reasonablerecommendations;Collectivenegotiation;EmployeeForum;EmployeeRepresentativeCongress.
Mutualgrowthoftheenterpriseandemployees;Improvedbenefitsandcareeropportunities;andGoodworkingenvironment.
Careerplans;and“GreenApple”and“GoldenApple”talenttrainingplans.
Employeesatisfaction;Turnovervolumeandrate;andNumberofpersonstrainedandexpensesofemployeetraining.
Suppliers Agreementsandcontracts;Regularvisits;Meetings;Negotiations.
Establishmentoflong-termstablecooperationwithBaosteeltoobtainreasonablereward.
Implements“Under-sunshine”ProcurementPlantobuildlong-termstablesupplychainandcreatepublicandtransparentprocure-mentcircumstances.
Numberofsuppliers;andProcurementpolicies.
Community Assistcommunityconstruction;Supportcultural,sportsandartactivitiesofthecommunity;Protectcommunityenvironment;Conductvolunteeractivities.
Mutualdevelopmentofthecommunityandtheenterprise;andGuaranteedprovisionofsafeandhealthenvironmenttothecommunity.
CarriesoutYunnanpovertyalleviationandTibetsupportefforts.
Inputsincommunityconstruction.
Non-governmentorga-nizations
Participateinassociationsandservingonthem;Sponsoring;Activelyganizeandparticipateinactivities.
Playinganactiveroleinallfieldsoftheassociationororganiza-tionwhichactivelyfulfillsocialresponsibilities.
Activelyparticipatesinenvironmentprotec-tion,economicdevelopmentandsocialprog-resseffortsinvolvingsocialresponsibility.
Numberofsocialorganizationsattended;Amountofannualfee;andTotalamountofdonation.
Mediaandthepublic Pressrelease;Mediabriefing;Informationcommunicationactivities;Phonecalls,emails,andfaxcontacts;Routineletters,phonecalls,visits;Website.
Stickingtotheroadofsustainabledevelopmentandbecom-ingamodeloffulfillingsocialresponsibilityasarepresentativeenterpriseofChina’ssteelindustry.
Issuesinformationrelatedtothefulfillmentofsocialresponsibilitiesonatimelybasis.
Numberofpressreleases;andCollectionandfeedbackofpublicopinions.
From the perspective of social, environmental and economic harmony, Baosteel will carefully think the relationship between social responsibility and long-term corporate development, translating social responsibilities into the momentum of corporate development and long-term benefit.
Stakeholders
Stakeholders’ Expectations on Baosteel Communication Methods with Interested Parties
11
O v e r v i e w
Stakeholders CommunicationMethods Stakeholders’ExpectationsofBaosteel Baosteel’sPractice MajorIndexes
Government,investors(State-ownedAssetsSupervisionandAdmin-istrationCommissionoftheStateCouncil)
Lawsandregulations;Issuanceofpolicydirectives;MeetingsoftheStateandMinistries,andimplementingspiritofthemeetings;Distributionandimplementationofdocu-ments;Regularworkreports;Routinework-relatedcommunications;Reportsandstatements;Visits.
Persistenceinlegitimatebusinessoperationwithhonestyandtrustworthiness;Constantenhancementofsustainableprofitability;Trueimprovementofproductqualityandservicelevel;Reinforcedresourcesavingandenvironmentalprotectionef-forts;Advancementofindependentinnovationandtechnologicalprogress;Guaranteedproductionsafety;Protectionofemployees’legalrights;andParticipationinsocialpublicwelfarecause.
Insistsonhuman-orientedscientificdevelop-ment,responsibleforstakeholdersandtheenvironmentwhilepursuingeconomicef-ficiency,soastorealizetheharmonybetweenenterprisedevelopmentandthesocietyandenvironment.
Salesrevenue;Profit;Tax;Employmentvolume;andValuemaintenance/incrementrateofstate-ownedassets.
Strategicpartners Executionofcontracts;Mutualvisitsandcontactsbetweentopmanagementofthepartners;Regularmeetings.
Achievementofwin-winresultswithBaosteelthroughtightstrategiccooperation.
ExtendsthefieldsanddepthofcooperationasBaosteelexpandsthroughmergerandpurchase.
Salesrevenue;Returnoninvestedcapital;Marketshare;andBrandvalue.
Customers Satisfactionsurvey;Customersymposium;Mutualvisitsbetweenthetopmanagements;Routinecommunications.
Provisionofcontinuallyimprovedqualityproductsandservices. Conductscustomersatisfactionsurvey;andAdoptsthewayof“in-advanceintervention”tosatisfycustomers’needs.
Customersatisfaction;andAwardsgrantedbycustomers.
Employees Labourcontracts;Reasonablerecommendations;Collectivenegotiation;EmployeeForum;EmployeeRepresentativeCongress.
Mutualgrowthoftheenterpriseandemployees;Improvedbenefitsandcareeropportunities;andGoodworkingenvironment.
Careerplans;and“GreenApple”and“GoldenApple”talenttrainingplans.
Employeesatisfaction;Turnovervolumeandrate;andNumberofpersonstrainedandexpensesofemployeetraining.
Suppliers Agreementsandcontracts;Regularvisits;Meetings;Negotiations.
Establishmentoflong-termstablecooperationwithBaosteeltoobtainreasonablereward.
Implements“Under-sunshine”ProcurementPlantobuildlong-termstablesupplychainandcreatepublicandtransparentprocure-mentcircumstances.
Numberofsuppliers;andProcurementpolicies.
Community Assistcommunityconstruction;Supportcultural,sportsandartactivitiesofthecommunity;Protectcommunityenvironment;Conductvolunteeractivities.
Mutualdevelopmentofthecommunityandtheenterprise;andGuaranteedprovisionofsafeandhealthenvironmenttothecommunity.
CarriesoutYunnanpovertyalleviationandTibetsupportefforts.
Inputsincommunityconstruction.
Non-governmentorga-nizations
Participateinassociationsandservingonthem;Sponsoring;Activelyganizeandparticipateinactivities.
Playinganactiveroleinallfieldsoftheassociationororganiza-tionwhichactivelyfulfillsocialresponsibilities.
Activelyparticipatesinenvironmentprotec-tion,economicdevelopmentandsocialprog-resseffortsinvolvingsocialresponsibility.
Numberofsocialorganizationsattended;Amountofannualfee;andTotalamountofdonation.
Mediaandthepublic Pressrelease;Mediabriefing;Informationcommunicationactivities;Phonecalls,emails,andfaxcontacts;Routineletters,phonecalls,visits;Website.
Stickingtotheroadofsustainabledevelopmentandbecom-ingamodeloffulfillingsocialresponsibilityasarepresentativeenterpriseofChina’ssteelindustry.
Issuesinformationrelatedtothefulfillmentofsocialresponsibilitiesonatimelybasis.
Numberofpressreleases;andCollectionandfeedbackofpublicopinions.
12
Employee Performance Report
Inrecentyears,withtheCompany’sbusinessexpansion,thelaborforcehasbeencontinuouslyenhancedwiththenumberofemployeesconstantlyincreasing.
In2008,theCompanytotallyhas108,914employees,wherethenumberofmanagement,technicalandoperationpositionsrespectivelyaccountfor9.1%,
23.5%and67.4%.Amongthem,thereare28,336femaleemployees,accountingfor26.0%ofthetotalemployment.
Baosteel’soverseassubsidiariesarespreadinEurope-African,Asia-Australian,andAmericanregions.BytheendofOctober2008,thesesubsidiariestotallyhad
230employees,including93foreignemployees.
Year Y2006 Y2007 Y2008
Numberofemployees 91308 90160 108914
91308
90160
108914
Y2006
Y2007
Y2008
Managementpersonnel
Technicalpersonnel
Operationpersonnel
9%
24%
67%
Lessthan35yearsold
36~45yearsold
46~55yearsold
Over56yearsold
36%
39%
24%
1%
Master’sDegree
Bachelor’sDegree
AssociateDegree
SecondaryVocationalEducationorlower
3%
16%
24%57%
Staff Composition
13
Employee Performance Report
TheCompanyprotects the legal rightsof localpeople in theplaceswhere it runsbusiness,andproperly
handlestherelationswithlocalpeople.Employmentoflocalpeopleandpromotionofexcellentlocalemploy-
eesintothemanagementnotonlyenhancetheCompany’slaborcapital,butalsobringeconomicbenefitsto
thelocalsocietyandstrengthenBaosteel’sabilitytolearntheneedsoflocalmarket.Baosteelhasoverseas
subsidiariesinAmerica,EuropeandAsia,andemployslocalpeopleasrequiredbythebusinessofsubsidiaries
andtherulesofmarket-orientedallocationinaccordancewiththeapplicablelaws,regulationsandemploy-
mentcodesofthecountryinwhichitrunsbusiness.Duringthethreeyearsfrom2006to2008,thenumber
oflocallyrecruitedemployeesrespectivelyaccountedfor42.6%,43.5%and41%inthetotalemploymentof
overseassubsidiaries.
TheCompanyguaranteestoprotecttheemployees’freeemploymentandlaborfreedomrights,andisdedi-
catedtocreatinggoodworkingenvironmentforthem,encouragingtheirworkingenthusiasm,improvingthe
systemoftalentretentionthroughattractivebenefits,caringhearts,andpromisingcareerdevelopment,and
elevatingtheemployees’satisfactionandloyalty.Inthisway,theemployeeturnoverratehasbeenkeptatlow
levelinyears.Duringthethreeyearsfrom2006to2008,theturnoverratewasrespectively0.6%,0.9%and
1.1%;ataverage,themale-femaleratioofemployeeturnoverwas5:1;therateofemployeeturnoverunder
theageof30yearsoldwas60%,andtheratewithintheageof30-40yearsoldwas30%ataverage.
42.6%
43.5%
41%
Y2006
Y2007
Y2008
ProportionofLocallyRecruitedEmployeesintheTotalEmploymentofOverseasSubsidiaries
Baosteel has overseas subsidiaries in America, Europe and Asia, and employs local people as required by the business of subsidiaries and the rules of market-oriented allocation in accordance with the applicable laws, regulations, and employment codes of the countries where it runs business.
Employment Offer
14
BaosteelhasestablishedWorkingRulesfortheFemaleEmployeeCom-
mitteeofBaosteelGroupCorporationTradeUnion,accordingtowhich
allbranchesandsubsidiariesmustsetupandbuildtheFemaleEmployee
CommitteeofTradeUnionandtheSodalityofFemaleProfessionals to
guidethefemaleemployeesinimprovingtheirqualificationsfromtheper-
spectiveof production andbusinessoperationwith a foothold in their
ownpositions.TheCompany alsomakes efforts in perfecting the right
protectionmechanismforfemaleemployeestotrulyprotectthefemale
employees’legalrightsandspecialinterests,activelyparticipatesincollec-
tivenegotiation,andprovidesthesectionof“SpecialProtectionforFemale
Employees” incollectivecontractssignedwiththeCompany.TheCom-
panyhaspaidtoenrollallitsfemaleemployeesintheCollectiveSpecial
MedicalInsuranceforFemaleEmployeeslaunchedbyShanghaiFederation
ofTradeUnions.In2008,totally20,132femaleemployeesparticipatedin
thisinsuranceandmanyofthemobtainedcompensation.
In order to face the upcoming aging society, better undertake the en-
terprise’ssocialresponsibilityforemployeepension, improvethequality
ofemployees’post-retirementliving,eliminatetheirworriesforold-aged
pension,andencouragethemtobecomefullyengagedinBaosteel’sbusi-
nessoperation,productionandconstructionactivities,theCompanyhas
developedtheCorporateAnnuityPlanbyfollowingtheprincipleof“old
measures for aged employees, newmeasures for new employees, and
steadytransitionforemployeesotherthanthem”onthebasisoforga-
nizing and integrating the original pension and benefits programs.The
CorporateAnnuitySystemadoptsa“payment-based”method,wherethe
paymentismadebyboththeenterpriseandemployeeseverymonthas
“saving” for employees’ pension.The annuity fund consistingof foresaid
paymentisindependentoftheenterprise’sassets,recordedasitactually
accrues,anduniformlymanagedbythetrustee,trustor,accountmanager,
andinvestmentmanager.Afterretirement,theemployeesmaydrawac-
cumulatedfundsfromtheirpersonalaccountsatonetimeorindifferent
times.
TheadvantageofCorporateAnnuitySystemalsoliesinitsmanagement
modeof“payment-basedsystem”,whichavoidstheaccumulationofen-
terprise’s long-term invisible debt under the“treatment-based system”.
Theindependenceofsuchfundensuresthesafetyofannuityassetsand
thesafeguardofemployees’interests.
TheuniformityofBaosteel’sCorporateAnnuityPlanwilleffectivelypush
theharmoniouslaborrelationshipforwardtoanewstage.
Baosteelpayscloseattentiontotheemployees’healthandgrowthatall
timesasitdevelops.Inimplementingthe“prevention-based”healthmain-
tenanceplan,theCompanyarrangesphysicalexaminationforemployees
every year with 100% coverage; for the employees performing special
jobs,itarrangesspecialoccupationalphysicalexamination;forfemaleem-
ployees,itaddsgynecologicalexaminationatleastonceeverytwoyears.
Moreover,theCompanyhasdevelopedahealthmanagementinformation
systemcoveringmostemployees, for theconvenienceofemployees to
inquiretheirhealthinformation.
TheCompanydeterminesthecriterionofemployeecompensationbasedonjobvalue,andinsistsontheperformance-orientedprinciple,givinghigher
rewardstoemployeeswithbetterperformance;ittreatsallemployeesequallyandconsistentlywithoutanygenderdifference;itisalsodedicatedtoat-
tractingandretainingthemostexcellenttalentsandprovidingmarket-competitivecompensation.Allemployees’wageincomeishigherthanthelocal
minimumwagestandard.
Accordingtoapplicablepoliciesandregulations,theCompanyfullypayslegalsocialinsuranceandbenefitsforallin-serviceemployees,mainlyincluding
basicpension insurance,basicmedical insurance,unemployment insurance,work-related injury insurance,maternity insurance,andhousingprovident
fund,etc,arrangesothersupplementalinsurancelikeaccidentinsuranceforemployeeswithconsiderationtotheenterprise’scharacteristics,andprovides
suchbenefitsasbusinessmeal,personalprotectionequipments,andpaidannualleave.In2008,theCompanystartedtoimplementtheCorporateAn-
nuityPlaninordertoimprovetheemployees’post-retirementlivingstandard,furtherenhancethecorporatecohesiveness,andpromotetheenterprise’s
harmonyandstability.
The Company determines the criterion of employee compensation based on job value, and insists on the performance-oriented principle, giving higher rewards to employees with better performance; it treats all employees equally and consistently without any gender difference; it is also dedicated to attracting and retaining the most excellent talents and providing market-competitive compensation.
Welfare
Employee Health Plan Corporate Annuity Plan
Welfare of Female Employees
15
In2008,greatchangestookplaceinthesafetyprotectionmechanismof
BaosteelGroupCorporationbecausefiresafety, trafficsafety,andsecu-
rityguardwere included into the“general safetysystem”.Starting from
guaranteeingtheemployees’healthandsafety,theCompanystrengthens
fulfillmentofsafetyresponsibilityatdifferentlevels,reinforcesbasicsafety
management, empowers safety inspection, improvespertinence andef-
fectivenessofsafetyeducationandtraining,andendeavorstoexploreand
carryouttheoperationmodeof“generalsafetysystem”.
TheCompany implements the SafetyProductionResponsibility System
atdifferentlevels.GeneralManageroftheHeadquartershassignedthe
SafetyObjectiveManagementResponsibilityAgreementseparatelywith
the safety production primary responsible person of 34 branches and
subsidiarieslikeBaosteelCo.,Ltd.,andbusinessdepartments.TheRespon-
sibilityAgreementspecifiestheresponsibilities,safetyproductionassess-
mentindicesandmethods,andreward-penaltymethodsoftheprimary
responsiblepersonofeachunit.Theunitswillbreakdownthesafetyob-
jectiveresponsibilities intodifferent levels,andsigntheSafetyObjective
ResponsibilityAgreementateach level, inordertothoroughly fulfill the
safetyresponsibilitiesbothhorizontallyandvertically.
Inordertofurtherheightenthesafetyresponsibilityawarenessofman-
agementatdifferentlevels,BaosteelManagerSafetyPracticeConference
washeldonJanuary3.Attheconference,leadersoftheCompanytook
theleadingivingsafetyoath;thereweremorethan2,000managersfrom
differentlevelsparticipatinginthejurationatthemainandbranchconfer-
encesites.
To make clear the safety management responsibilities of construction
Baosteelstrictlyfollowsthenationalregulationsconcerninglaborsafetyandhealth.Inordertofurtherguaranteetheemployees’healthandsafety,the
Companyhasdevelopedtheactivityplanandevaluationmethodswithconsiderationtoitsactualsituationbystartingfromestablishmentandperfection
ofthethree-levelnetworkorganizationsystem,regulationsandrulessystem,supervisionandinspectionsystem,andworkprocessessystem.Italsofully
implementsfourrules,namelyBaosteelTradeUnion’sManagementMeasuresforThree-levelNetworkSupervisionandInspectionofLaborSafetyProtec-
tion,Baosteel’sManagementMeasuresforEmployeeOccupationalHealthandSafetyRepresentatives,Baosteel’sManagementMeasuresforTreatmentof
EmployeeSafetyandHealthInformation,andBaosteel’sManagementMeasuresforSupervision,CompliantandReportingofLaborSafetyProtection.In
addition,theCompanyconsiderstheconstructionsafety“100[Note]Team”aimingatimplementingstandardoperationandeliminatinghabitualincompliance
asthebasicconditionforteamupgradingandevaluation.
[Note]: “100” refers to put safety in the 1st place, keep peccancy and accident at zero.
Employee Safety Protection
The Company’s Safety Protection Efforts
Employees Performance Report
projects, theCompanymainly addresses their safetymanagement pro-
cessesanddepartmentresponsibilities.Itspecifiesthesafetymanagement
processes and responsibilities of eight departments such as Investment
ManagementDepartment,SafetySupervisionDepartment,ProjectOwn-
er (landplot,branchor subsidiary)ateight stages includingpreliminary
planning,feasibilityresearch,andpreliminarydesign.
Tostrengthenthetreatmentofpersonsresponsibleforvariousaccidents,
theCompanyhasdevelopedBaosteel’sGuidelinesonAccidentAssess-
mentbasedontheInterimMeasuresforInvestigatingtheResponsibilities
forIncomplianceandSafetyProductionAccidents,furtherspecifyingthe
requirementsforassessmentofaccidentresponsibilities.
2008EmployeeInjuryReport
NumberofInjuries(Numberofinjuries
permillionworkhours)
InjuryFrequency(Numberoflostdayspermillionworkhours)
RateofSevereInjury
31 0.13 61.54
Employee Performance Report
16
Intheaspectofmanagementtalents,withdecodingofstrategiesasthekey
pointandseekingtalentshortageasthestartingpoint,theCompanyhas
developedthe2008BackupPlanfor“strategicinsightbasedleadershiptal-
entdevelopment”,formingtheplanonleadershipalternates,high-potential
backupcandidates,andtalentintroduction,andfurtherheighteningtheper-
tinenceofbackupleadershiptalenttrainingactivities.Besides,theCompany
hasestablishedandimprovedthemanagementhierarchicaltrainingsystem,
deepened the concept of“Training beforeGoing onDuty”, andmainly
pushedforwardthequalificationtrainingformanagementpersonnel.
Withrespecttotechnicalbusinesstalents,theCompanyhasselectedthe
fifthgroupoftechnicalbusinessexperts,sofarformingateamconsisting
of9permanentexperts,15seniorexperts,and82technicalbusinessex-
perts;byseekingapproaches,carriersandmethodsforexpert-typetalents
toshareknowledgewithintheGroup,andestablishingrelevantincentive
mechanism,theCompanyhasdevelopedsomebranditemspopularwith
thetechnicalpersonnel,e.g.expertforum,expertblog;Baosteelhasalso
plannedandestablishedthe“GoldenApple”Plan,i.e.tobuildplatformsfor
allcorefieldsofBaosteeltotrainabatchoftechnicalleaderswhocantake
awalkontheinternationalplatform,anddrivethetechnicalprogressand
productcompetitivenessofBaosteel.
Regardingskilledtalents,theCompanyproposedtheobjectiveof“Train-
ingaThousandNewTechnicians inThreeYears”andcreated the“1+X”
trainingstandardwithBaosteelfeaturesin2004.Bytheendof2006,the
Companyaccomplishedthetrainingof1,798techniciansand312senior
techniciansfromthesteelmetallurgy,steelrolling,mechanical,electrical,in-
strument,powerandenergy,watertreatment,transportation,testingand
assay,chemical,andbuildingfurnaceandcommunicationfields,where814
technicians and 111 senior technicianswere certified as qualified. From
2007 to2009, a newcycleof“Training aThousandNewTechnicians in
ThreeYears”issmoothlyunderway,anditisreportedthat875technicians
and212seniortechnicianswerequalified.
Withregardtoyoungemployees,theCompanyhasdevelopedthe“role-
based” trainingmode for newly-coming college graduates, i.e. allow the
new-comerstobecomerapidlyadaptivetotheorganizationandtheiroc-
cupationsthroughthreestagesincludingpre-jobtraining,on-jobinternship,
andon-jobpractice.TheCompanyhasalsoadvancedbasictalenttraining
activitiesandimplementedthe“GreenApple”Plan,i.e.toselectabatchof
high-qualityandhigh-potentialtalentsfromthenewly-comingcollegegrad-
uatesintotheCompany’sbasictalentdatabaseeveryyearforthepurpose
oftrainingfutureseniormanagementandtechnicaltalentsforBaosteel,and
implementa2-yearcomprehensivetrainingplantoprovideanacceleration
racewayforbackupyoungtalents’careerdevelopment.
Asforinternationaltalents,in2008,byexcavatingandextendingthetrain-
ingresourceslikeoverseasinstitutions,enterprisesandcompaniesandfor
thepurposeofenhancing“foreign languageskills, informationprocessing
ability, cross-cultural communication ability and global perspective”, the
Companyactivelyincreasedtheemployees’overseastrainingexperiences
and selected 312 persons to attend overseas special training and on-
temporary-positiontrainingforcoremanagementpersonnelandbackup
talents,coretechnicalbusinesstalents,talentsreservedforoverseasdevel-
opment,andthekeyfunctionalmanagementtalentsoftheHeadquarters
andall industrialsectors.Thesetrainingsexpandedtheemployees’global
perspectiveandenrichedtheirlearningexperiences.
TheCompanyhassettheobjectiveto“keepenhancingtheCompany’scorecompetence,andspeedupthebuildingoffirst-classtalentteamadaptive
totheCompany’sdevelopmentstrategy”,activelyexploresthegrowthruleofmanagementtalents,technicalbusiness(skilled)talents,andotherspecial
talents,andperfectsthedualcareerpathformanagementtalentsandtechnicalbusiness(skilled)talentsaccordingtothe“dualchannel”concept,providing
paralleledpromotionladdersforbothtypesoftalents.
Also,theCompanyhasdevelopedaclassifiedandhierarchicaltrainingsystemandprovideseightcategoriesoftrainingprogramsincludingleadershipand
managementhierarchicaltraining,educationofpartyconstructionandcorporateculture,specialmanagementtraining,engineeringtechnologytraining,
operationandmaintenancetraining,computerandlanguageskilltraining,networktraining,anddegreeanddiplomatrainingfordifferentemployees,in
ordertofullyimprovethetheirjobqualificationsandabilities,andrealizemutualgrowthofemployeesandtheenterprise.In2008,theCompanytotally
carriedout6,388trainingprograms,upby7.5%overtheyear2007;from2006to2008,thenumberoftrainingpersonstrainedincreasedyearbyyear
(seethefollowingdiagramfordetails);in2008,eachpersonreceived3.2timesand58.7hoursoftrainingperyearataverage.
Y2006
Numberofpersonstrained(Unit:10thousand)
Y2007
Y2008
40
302010
Keep enhancing the Company’s core competence, andSpeed up the building of first-class talent team adaptive to the Company’s development strategy
Training and Education
17
TheCompanystrictlyobeystheapplicablenationallawsandcodesaswellastheenterprise’srulesandregulations,observesandimplementstheinternational
conventions,internationallaborstandardsandotherapplicableindustrystandardsforwhichtheChineseGovernmenthasmadecommitment,keepsitspromiseto
respecthumanrights,nottoemployanyminorworker,nottodiscriminateagainstanyemployee,andtoprotecttherightsoflocalpeople,anduncompromisingly
prohibitstheemploymentofanyminorworker.TheCompanyadoptstheemploymentmechanismofequalcareeropportunityforallemployeesand“samework
samepay”forbothmaleandfemaleemployees.
TheCompanyhasbuiltahumanresourceexchangeandallocationplatformtopromotere-employmentofworkerswhohavelosttheirjobs,insteadofpushing
redundantemployeestothesociety.TheCompanyconsidersitanimportantpartofBaosteel’ssocialresponsibilitytocomprehensivelyimplementtheLaborCon-
tractLaw,persistsinincorporatinglaborrelationshipintotheenterprise’sstrategicmanagement,andmakesgreateffortstobuildaharmoniouslaborrelationship.
BaosteelestablishedtheOpenFactoryAffairsSteeringTeamin2000.Every
year,thePartyCommittee,AdministrativeOffice,andTradeUnionissuea
jointdocumenttospecifythekeypointsof factoryaffairsopennessand
democraticmanagementefforts.TheCompanyhas issued theOpinions
onEstablishingandPerfecting theFactoryAffairsOpennessResponsibil-
itySystemofBaosteelGroupCorporation,MeasuresofBaosteelGroup
CorporationforInvestigatingtheFactoryAffairsOpennessResponsibility
(TrialImplementation),andtheFactoryAffairsOpennessAssessmentRules
ofBaosteelGroupCorporation,realizedscientificmanagementoffactory
affairsopennessefforts,andfacilitatedtheimprovementoffactoryaffairs
opennessquality.In2003and2007,theNationalFactoryAffairsOpenness
CoordinatingGroupgrantedBaosteelthetitleof“AdvancedOrganization
ofFactoryAffairsOpennessandDemocraticManagement”.
The Headquarters and subordinate independent corporations of the
Groupplus thebranchesandsubsidiarieswithcorporatecapacityhave
establishedcollectivenegotiationmechanismincompliancewiththeLa-
borLawofthePeople’sRepublicofChina,theTradeUnionLawofthe
People’sRepublicofChina,andtheCollectiveContractProvisionsissued
bytheMinistryofLaborandSocialSecurity.Representativesoftheen-
terpriseandtheTradeUnionconductequalnegotiationregardinglabor
remuneration,workinghours, rest andvacation, labor safety andhealth
protection,vocational training, insuranceandbenefits, and regularly sign
collectivecontractandsubmitittothelocallaboradministrativeagency
forreviewandarchive.Atpresent,Baosteel’scollectivenegotiationmecha-
nismandexecutionofcollectivecontractcovers100%employees.
“Baosteelwillneverletanemployeeliveahardlifeorfailtovisitadoc-
tororlethis/herchilddiscontinueschoolingbecauseofpoverty.”Thisisa
seriouscommitmentmadebyBaosteel’s leadersforallemployeeswhen
perfectingthelong-termalleviationandwarmthdeliverymechanismand
implementationmethods.
InSeptember2005,BaosteelissuedtheOpinionsonEstablishingandPer-
fecting the Long-termHelp-the-poor andWarmthDeliveryMechanism
andtheMeasuresforImplementationofHelp-the-poorandWarmthDe-
liveryActivities, and actively built themulti-layer and all-sided long-term
alleviationandwarmthdeliverymechanism.
InMay2008,incombinationwiththeactivitiesforfurtherstudyandprac-
ticeofScientificDevelopmentConcept,theCompanyproposedtheOpin-
ionsonFurtherPerfectionoftheLong-termHelp-the-poorandWarmth
DeliveryMechanism,andmadecorrespondingrevisiontotheMeasuresfor
ImplementationofHelp-the-poorandWarmthDeliveryActivities.
According tostatistics, in theprevious3years, totally51,918employees
offinancialdifficultyobtainedsubsidyofRMB30.76million;4,474families
of financial difficulty obtained study grant of RMB2.78million for their
children;medicalaidofRMB16.7529millionwasprovided.In2008,25,153
employeesoffinancialdifficultyobtainedsubsidyofRMB9.45million;1,896
familiesoffinancialdifficultyobtainedstudygrantofRMB1millionfortheir
children;2,360sickemployeesobtainedmedicalaidofRMB5.21million.
In January2004,BaosteelGroupCorporationheld thefirst sessionofEm-
ployee Representative Congress, and issued the Employee Representative
CongressSystemofBaosteelGroupCorporation.In2006,accordingtothe
management mode of subordinate organizations, Baosteel established the
multi-levelemployeerepresentativecongresssystem.TheAdministrativeOf-
ficeandthePartyCommitteejointlyissuedtheOpinionsofBaosteelGroup
CorporationonStandardizingtheEmployeeRepresentativeCongressSystem
atDifferentLevels.TheEmployeeRepresentativeCongressofBaosteelGroup
CorporationisdividedintosevencategoriesatthreelevelsincludingtheHead-
quarters,subsidiaries(branches),andsubordinatefactories,fullyguaranteeing
thedemocraticrightsofemployees.
The Company persists in incorporating labor relationship into the enterprise’s strategic man-agement, and makes great efforts to build a har-monious labor relationship.
Legal Rights Protection
Collective Labour Contract Alleviation Plan
Employee Representative Congress System
Openness of Factory Affairs
Employee Performance Report
18
Education PovertyalleviationandTibetsupport
Disasterrelief Culturalandartactivities
Other
Social Performance Report
Inpreviousyears,Baosteelhasalwayskeptcontributingandservingthe
society, supporting the charity and publicwelfare cause, protecting the
weakgroup,andpursuingtheharmonyofeconomicefficiencyandsocial
benefits.According to incomplete statistics,Baosteelhadaccumulatively
donatedRMB830millionsince2001,wherethetotalamountofdona-
tionin2008mountedRMB175million.Seethefollowingtablefordetails:
CategoryAmountofDonation
(RMB10,000)
Totaldonation 17509
Education 165
PovertyalleviationandTibetsupport 3185
Disasterrelief 11998
Culturalandartactivities 409
Other 1752
Social Contribution
On12thMay 2008, aM8.0 severe earthquake burst out inWenchuan
County,SichuanProvince.Twohoursaftertheoccurrenceofearthquake,
Baosteelmadeimmediateresponseandcarriedoutreliefandrescueactivi-
tiesasquicklyaspossibleundertheprincipleof“ConsideringtheUrgency
ofDisaster-hitAreasasOurEmergency”.Baosteelorganizedatruckfleet
tosendtents,quilts,cans,colorplatebarracksandotherdisasterreliefma-
terialstoMianyangandDujiangyanasoneofthefirstdonationsdelivered
tothedisaster-hitareas.
OnMay14,inadditiontothegrantofRMB10million,Baosteeldecided
tofullyexertitsadvantagesbydonatingandbuildingcolorplatebarracks
worthRMB50million in thedisaster-hitareas,providing shelters foraf-
fectedpeople.Inashortperiodofonemonth,theCompanybuilt6villages
includingXiangfengqiaoCommunityandJunleTownforpeopleafflictedby
thedisaster,accumulativelycoveringanareaof48,357m2.GeHonglin,the
DeputySecretaryofCPCChengduMunicipalCommitteeandMayorof
Chengdusaidatthehand-overceremonyofBaosteelcolorplatebarracks:
“thegreat lovethatBaosteelshowsduringthedisasterreliefandrescue
winstheloveandesteemoftheDujiangyanandPengzhoupeople.”
Moreover, theemployeesofBaosteelwerealsoverygenerous tomake
severalcyclesofdonation,totallyRMB44.20million.Baosteeltotallycon-
tributedgrantsanddonationsofRMB117millionfortheearthquakedi-
saster.
But thiswasnot theendofBaosteel’s support to thedisaster-hit areas.
On12thNovember2008,HappyHomeYiyuanSteel-structureResiden-
tialQuarter – the first key comfortable housingproject undertakenby
Baosteelinthepost-disasterreconstructionofSichuan–officiallylaidthe
foundationstone.Thesteel-structurehousesinthisquarterapplythere-
searchresultsofInternationalIron&steelInstituteobtainedfromitsLiving
SteelProjectinmanyyears.Characterizedbyenergysaving,environment
protection,shortconstructionperiod,occupyinglessresources,andgood
anti-earthquakeperformance,itistheidealchoiceforpost-disasterrecon-
struction comfortable housing projects. Baosteel is creating a promising
futurefordisaster-hitareasbythesupportofits“steelbackbone”.
Earthquake Relief and Rescue
19
Heixiazi Island On 14th October 2008, China and Russia held the “China-Russia Merestone Unveiling Ceremony” on Heixiazi Island, indicating that half of Heixiazi Island was returned to China. Situated in the border area, Heixiazi Island plays a very important strategic role.
Kunlun Station Kunlun Station settled down at Dome A of Antarctic Ice Sheet in January 2009 as the third scientific expedition of China in Antarctic area in succession to the Great Wall Station and Zhongshan Station. At the currently completed Phase I project of Hunlun Station, the main building is made of steel structure and covers a building area of 236m2.
Donation and Sponsorship Yunnan Poverty Alleviation and Tibet Support
Social Performance Report
Donating Color Plate Barracks for Heixiazi Island
Just before the return of Heixiazi Island to China in September 2008,
BaosteeldonatedcolorplatebarrackstotheHeixiaziIslandGarrisonof
HeilongjiangProvincialMilitaryCommand,totallycoveringbuildingareaof
1600m2andworthRMB3.5million.Thedonationofsuchbarracksshows
Baosteel’ssinceresupporttothenationaldefenseofChina.
Constructing Antarctic Kunlun Station with Donation of Main Materials
Baosteelalwayssupportsthecauseofpolarscientificexpeditionandhas
participated in the construction andexpansionofAntarcticGreatWall
StationandKunlunStation.In2008,Baosteeldonatedmainbuildingmate-
rialsworthRMB4.5milliontoKunlunStation–thefirstAntarcticscientific
expeditionstationofChinaandassigned13employeestotheSouthPole
forconstructiontasks.BaosteeldevelopedthenewgenerationofPVDF
colorsteelplatewithstrongresistancetoextremelowtemperatureand
UV radiation aswell as high-performancefire andweathering resistant
steelandnew-typestainlesssteel.
Yunnan Poverty Alleviation Efforts
TheYunnanfixed-pointpovertyalleviationprogramofBaosteelhasbeen
launchedforsixyear.TheCompanyhasaccumulativelyprovidedfundof
RMB40.9943milliontoNing’er,Jiangcheng,Mojiang,andZhenyuancoun-
tiesinPu’erCity,YunnanProvince.
Theprogrammainlycoversconstructionofhopeelementaryandmiddle
schoolsandhealthcenters,rebuildingofmud-and-strawhutsandbamboo
huts,constructionofadequatefoodandclothingvillages,andimplementa-
tionofwhole-villagepovertyalleviationadvancementandeducationsup-
port,etc,greatlybenefitingthepoverty-strickenpeopleinPu’erCity.
Duringthefixed-pointpovertyalleviationpractice,Baosteelalwayssticks
totheprincipleof“practicality”,aimsatsolvingthemostdirectandrealistic
problems, andbenefits thepoorest areasandgroupsfirst; itpersists in
highlighting important points and integrating resources and implements
whole-villagepovertyalleviationadvancementandadjacent-areadevelop-
ment, thusmagnifying themultiplier effect of assistance and support; it
adherestothecombinationof“bloodtransfusion”and“bloodformation”,
emphasizes industrial development, and enhances the poverty-stricken
areas’economicself-accumulationandself-developmentability.Baosteel’s
povertyalleviationefforts inmanyyears is fullyrecognizedbytheState
CouncilLeadingGroupOfficeofPovertyAlleviationandDevelopment
andtheGovernmentandPovertyAlleviationandDevelopmentOfficeof
YunnanProvince,andhighlypraisedbytheGovernmentofPu’erCityand
thefourcounties.
Baosteel’s Tibet Support Efforts
Sincethestartoffixed-pointTibetsupportprogramin2002,Baosteelhas
assignedthreebatchesofTibetsupportcadres,inputmorethanRMB100
million, and undertaken construction of nearly a hundredTibet support
projects.
Baosteel has accurately found out the bottleneck that restricts the eco-
nomicdevelopmentofZhongbaCountyandinputplentifulmoneyinthe
aspectsofroad,traffic,andofficefacilities.Forexample,thefarmer’smarket
constructedwithsupportfromBaosteelhassolvedthelivestockproducts
circulationproblemofZhongbaCounty.TheconstructionofFarmersand
HerdersVocationalSchool,BorderTradeMarket,ZhongbaCountyEmpoly-
eeCulturalandEntertainmentCenterandotherprojectsleadstoprogress
oflocalsociety.Theherders’comfortablehousingprojectsupportedbyBao-
steelisunderconstruction,andhasprovidednearly2,000concretehouses.
20
“Everlasting Love, Eyesight Restoring Action” is so far the largest, widest and most effective cataract-patient eyesight restoring project in China. It is jointly launched by China Disabled Persons’ Federation and China Foundation for Disabled Per-sons.
In1996,Baosteeldecidedtosavetheanniversaryceremonyexpensesfor
aprojectnamed“RetracingtheLongMarch”,whichintendedtodonate
andbuild10hopeschoolsalongtherouteofLongMarch.Sincethen,the
CompanyhasstarteditsclosetiewiththeHopeProject.
Inaperiodofovertenyears,Baosteelhasconstructedandsupported64
hopeschoolsdistributedinmanyprovincesincludingYunnan,Hunan,Sich-
uan,Gansu,Shaanxi,Anhui,Guizhou, Jiangxi,Shandong,andShanxi;along
withthereformofeducationsystem,Baosteelstillkeepsintouchwith47
hope schools, and regularly exchanges correspondenceandcarriesout
studentassistance,summercampandotheractivities.
For example, every year Baosteel branches donate hope school study
granttoYunnanYouthDevelopmentFoundation forthepurposeofas-
sistingpoorstudentsinBaosteelhopeschools.BaosteelResearchInstitute
alwayskeepsclosecontactwiththeBaosteelHopeElementarySchoolin
ShangyouCountyJiangxiProvince,andoftendonatesteachingtools;the
summercampjointlysponsoredbyBaosteelNo.1Iron&SteelCompany
andBaosteelStainlessSteelBranchisthemostexcitingexpectationofpu-
pilsofSuyuHopeElementarySchoolinHuitongCountyHunanProvince
because studentswho has excellentmoral and academic performance
willbenominatedforasummercampinShanghai;since2004,Baosteel
Internationalhasstartedtomakedonationfor100poverty-strickenstu-
dentsintheschoolsofJiangchengCountyYunnanProvince,assistingthem
toaccomplishtheirstudies.
In2008,theHopeProjectEducationSupportProgramofBaosteelselect-
ed7hopeschoolsfortrialimplementationofBaosteelHopeEducation
ScholarshipandTeachingAwardSystem.Therewere72studentswinning
scholarship,72studentsobtainingstudygrant,and19teachersattaining
teachingaward.
By now, Baosteel has accumulatively donated RMB 300million to the
HopeProject.
In1990,BaosteelEducationFundswassetup,creatingaprecedent for
enterprises tomake contribution in establishing education funds. In 19
years,theamountofBaosteelEducationFundsusedtorewardandsup-
porteducationhasexceededRMB110million,with14,198teachersand
students wining awards. In 2008, 985 teachers and students from 100
highereducation institutionsthroughoutChinaand18institutesofChi-
neseAcademyofSciencessuccessfullywonBaosteelEducationAwards.
Amongthem,9teachersincludingProfessorTianZuohuafromShanghai
JiaoTongUniversitywon2008BaosteelExcellentTeacherSpecialAward;8
teachersincludingProfessorGaoSongfromPekingUniversitywerenomi-
natedfor2008BaosteelExcellentTeacherSpecialAward;and50students
includingWuFufafromChineseAcademyofScienceswon2008Baosteel
ExcellentStudentSpecialAward.Besides, therewere679 students and
239teachersrespectivelywinningBaosteelExcellentStudentAwardand
BaosteelExcellentTeacherAward.
Baosteelalwayscaresforthedisabledandweakgroupandhaslaunched
theprojectof“EverlastingLove,EyesightRestoringAction”[Note] inPu’er
CityYunnanandZhongbaCountyTibetsince2007.In2008,1,707pov-
erty-strickencataractpatientsreceivedeyeoperationandregainedtheir
visualfunctions.Thistrulyachievedthegoalof“HealingOnePerson,Lib-
eratingOneFamily,andAffectingaLargeGroupofPeople”,andobtained
greatsocialrepercussions.HuMeiyu–a97-year-oldwomanfromTong-
guanTownMojiangCounty–whohadsufferedcataractformorethan20
years,camefortheeyeoperationonawheelchairpushedbyherfamilies.
After the successful operation, the oldwoman happily saw her grand-
grand-son.Shewassohappythatshesaidtoeverybody:“TheGovern-
mentandBaosteelaregreat.”
Baosteel’s Hope Project Education Support Baosteel’s Education Fund
“Everlasting Love, Eyesight Restoring Action”
21
Sinceitsestablishment,Baosteelhasalwaysbeensupportingtheconstructionanddevelopmentofplaceswhereitrunsbusiness,strengtheningtheinter-
activedevelopmentofregionaleconomy,participatingincommunityactivitiesofdifferentforms,activelyundertakingitssocialresponsibilities,andmaking
actualeffortsinbuildingharmoniouscommunity.
Baosteelhasmorethan10volunteerserviceteamsforco-construction
with the community, regularly providing volunteer service for nursing
homesandchildrenwelfareschools.SincethestartofHelp-the-Poorand
WarmthDeliveryProgramattheendof2005,nearly5,000youngvolun-
teersfromthevolunteerserviceteamsofBaosteelhaveparticipatedin
volunteerservices.Theyprovidevolunteerservicestothesocietyinmore
than70serviceformscloselyconnectingwiththepeople’slives.Theyhave
accumulativelyservedover10thousandresidents.
BaosteelislocatedatthemarineoutfalloftheYangtzeRiverinBaoshan
DistrictShanghaiCity.During the thirtyyears’ constructionandgrowth,
BaosteelhaspowerfullypromotedthedevelopmentofBaoshanDistrict
while obtaining great local supports. Relying on Baosteel, BaoshanDis-
tricthasshapedtheindustrialeconomycharacterizedbymetallurgyand
supportingextendedindustries,andformedtheproductionbasesforsix
categoriesofproductssuchascontainer,steelstructure,elevators,non-
ferrousmetals,metalcontainerproducts,andsteelproducts.Theabove
characteristic industriesaccount for40%ofthedistrict’sgross industrial
outputvalue.Furthermore,BaoshanDistricthasbecomeoneofthelarg-
eststeeltradecentersinChina.Intheprevious30years,Baoshanhasseen
significantlyenhancedeconomicstrength,greatchangesinvisageofurban
andruralareas,comprehensivesocialprogress,andremarkablyimproved
qualityofliving.Thedistricthaswalkedonaroadofintegrateddevelop-
mentforbothcityandcountryside.
Volunteer Activities Community Changes in 30 Years
Community Relations
Social Performance Report
22
In 2008, theCompany strictly followed the applicable laws, regulations
andothernormativedocuments.Therefore,therewasnooccurrenceof
administrative or juridical penalty as a result of incompliance with any
applicable law, regulation or other normative document during routine
businessoperation.
The Company requires its branches and subsidiaries to develop their
management rules in accordancewith the applicable national laws and
regulations andother normativedocuments, inorder to guarantee the
legitimacyandcomplianceoftheirbusinessoperation.Withregardtothe
provisionanduseofproductsandservices,theCompanyinsistsonthe
corporate culture of“credibility and cooperation” and legally fulfills its
OnJuly19,2007,BaosteelDevelopmentCo.,Ltd.andtheGovernmentof
BaoshanDistrictsignedtheAgreementonAssistanceandSupporttoSo-
cialistNewCountrysideConstruction,whichplanstoprovideassistance
andsupporttothreeeconomicallyweakvillagesincludingLuodianTown
GuangmingVillage,LuojingTownXinluVillage,andYuepuTown Juyuanq-
iaoVillageinBaoshanDistrictin3years.InJanuary2008,thefirstbatch
ofassistanceandsupportprojectswasestablished,namelyLuodianTown
GuangmingVillageVegetable Storage and Preservation Project,Yuepu
TownJuyuanqiaoVillagePublicServiceCenterProject,andLuojingTown
XinluVillageResidentialAreaRoadConstructionProject.Theprojectsre-
quiredtotalinvestmentofRMB2.4millionandagreementsweresigned
forthem.Bytheendof2008,allofthethreeprojectswerecompleted.
Baosteel’s New Countryside Development Project
Baosteel invested RMB 1.5million in LuodianTownGuangmingVillage
VegetableStorageandPreservationProject.Nowthecoldvegetablestor-
agehousewascompletedandofficiallyput intooperationonOctober
5,2008.Thishouseeffectivelymitigatestheproblemthatfarmerssellex-
cessivevegetableat lowpricesduringpeakseasonbuthaveinadequate
vegetabletosellduringoffseasonthoughthepricesarehigh.Theproject
facilitatescounter-seasonsalesofvegetableandincreasesthefarmers’in-
come.Thehousealsoprovidescoldstorageserviceforover300Chinese
acresofvegetableproducedby3surroundingvillages,i.e.ShuliqiaoVillage,
TianpingVillage,andMaojiaVillage.
Baosteel investedRMB400,000 inYuepuTownJuyuanqiaoVillagePublic
ServiceCenterProject,whichwascompletedat theendofDecember
2008.Thecentercoversbuildingareaof780m2.Afterbeingputintouse,
thecenterwillprovideconvenienceforvillagerstohandlecommunityaf-
fairs,aswellasenrichthevillagers’culturallives.
BaosteelinvestedRMB500,000inLuojingTownXinluVillageResidential
AreaRoadConstructionProject,whichwascompletedinMay2005.The
project includesrebuiltandnewly-builtwhitecementroadof2.78kilo-
meters andcovers areaof6,111.6m2.Now, theXinluVillagehaswhite
cement road“toward any house and any family”, very convenient for
people’scomingandgoing.Greatchangeshavetakenplaceinthevisage
ofthisvillage.
Compliance
obligationsspecified in thecontractswithpartners.For this reason, the
CompanyhasbeenappraisedbyShanghaiAdministrationofIndustryand
Commerceas“aContractAbiding&TrustworthyEnterprise”inconsecu-
tive18years;accordingtothecontractcreditratingconductedbyPudong
NewAreaEnterpriseContractCreditPromotionCommission,theCom-
panyhasbeenratedasAAAGradeenterprise(thehighestcreditrating)
ineachyearsince2003.
23
TheCompanyattachesgreat importancetoanti-corruptioneffortsand
hasperfectedtheorganizationalframeworkssuchasBaosteelDiscipline
InspectionCommissionandStandingCommitteeofDisciplineInspection
Commission. Inordertostrengthenthe leadershipoveranti-corruption
activities, theCompanyhassetup theParty’sWorkStyleConstruction
andAnti-corruptionResponsibilitySystemLeadingGroup,forwhichthe
Company’sViceChairmanandSecretaryofPartyCommitteeservesas
theDirector.ThesecondarysubordinateorganizationsofBaosteelhave
all established theirdiscipline inspection and supervision authorities, for
whichfull-time(part-time)SecretaryofDisciplineInspectionCommission
andDirectorofSupervisionOffice (HeadofSupervisionDepartment)
aredesignated.
AccordingtotheuniformdeploymentoftheCentralGovernment,Bao-
steel has issued theMeasures for Implementing 2008-2012Work Plan
on Establishing and Perfecting theCorruption Punishment and Preven-
tion System.This document specifiesBaosteel’s objectiveof corruption
punishmentandpreventionsystemconstructioninfuturefiveyears,and
proposestensoftasksforsevenaspectssuchaseducation,rules,supervi-
sion,sourcegovernance,andpunishment.TheCompanyhasalsofinished
responsibilitybreakdown,specifiedtheresponsibleprincipal,workcontent
and time-points of accomplishment, and ensured the fulfillment of key
tasksthroughpromotionandcheck.
In2008,Baosteelcarefullyfollowedthe“SevenRequirements”ofSelf-dis-
ciplineandCleanConductthatCPCCentralCommissionforDiscipline
Inspectionproposedforleadersofstate-ownedenterprises,includedanti-
corruptioneducationintothestudyofPartyCommitteeCenterGroup
andtrainingofleaders,andcarriedoutreportingoftendentiousproblems,
analysisoftypicalcases,educationofthree“DoNotLetItPass”[Note],plus
educationactivitiessuchascountersigningofcleanconductandprecau-
tionaryconversations.TheCompanyalsoproducedavigilanteducation
filmnamedTrack,andorganized281sessions(times)ofanti-corruption
Three “Do Not Let It Pass”: Do not let it pass if the causes and responsibilities of a case have not been accurately investigated and determined; do not let it pass if the penalty receiver and other part members, cadres and employees have not learned lessons; do not let it pass if the corrective action has not been implemented and responsibilities not investigated. “Three majors and one huge”: Major issues for decision-making, appointment and removal of major employees, arrangement of major projects, and use of huge amount capital.
Anti-corruption
themeeducation,fromwhich21,052personstrainedreceivededucation.
Apre-jobcollectiveconversationrelatedtocleanconductwasmadeto
605 leaders, andprecautionary conversationsweremade to120 lead-
ers,while1630agreementsonParty’sworkstyleconstructionandanti-
corruptionresponsibilityweresigned,thuscreatingagoodcircumstance
forcleanconduct.AttheCompany,149leadersdirectlyresponsibletothe
Headquartersmadedeclarationofmajorissues;morethan4,500persons
madecommitment tocleanconduct; and1,908persons trainedvolun-
tarily handed in cash, gifts and negotiable securities, equivalent toRMB
1.9million.
In2008,intheexperimentalactivitiesoflearningandexecutingtheCon-
ceptofScientificDevelopment,Baosteelpresentedandcarefullyexecuted
therectificationplanssuchastheMeasuresforImplementing2008-2012
WorkPlanonEstablishingandPerfectingtheCorruptionPunishmentand
PreventionSystem,SupervisionProceduresforDecision-makingofMajor
Issues,PlanonPromotingthe“Under-sunshine”ProcurementAction,and
ImplementingMeasuresforPromoting“Double-Excellence”ProjectCon-
structionpertinenttosignificantproblemsencounteredinanti-corruption
efforts, further deepened the Party’swork style construction and anti-
corruptionphilosophyof“FocusingonCenter,IncludedintoManagement,
IncorporatedintoProcesses,andPlayinganActiveRole”,andeffectively
facilitatedthesystematicanti-corruptionconstruction.
TheCompanyrevisedandperfectedthedecision-makingsystemof“three
majors and one huge” [Note], and further specified the supervision pro-
cedures fordecision-makingofmajor issues. Italsodevelopedtherules
suchasRelevantProvisionsonOptimizationofSubsidiaries’MajorIssue
Decision-makingProcedures,EightGuidelinesonBaosteelRemuneration
Management,andProvisionsonManagementofPart-timeJobsTakenby
LeadersofBaosteelGroupCorporation,enhanceditscontroloversub-
sidiaries,andstandardizedtheremunerationmanagement,part-timejob
takingandpart-timecompensation.
Social Performance Report
24
Economic Performance Report
Business IncomeUnit:RMB100millionyuan
Total ProfitUnit:RMB100millionyuan
Total AssetsUnit:RMB100millionyuan
Net AssetsUnit:RMB100millionyuan
Y2006 Y2007 Y2008
1806.81
2277.16
2468.39
1334.47
2269.59
2194.35
Y2006 Y2007 Y2008
225.77
356.47
238.13
Y2006 Y2007 Y2008
3564.04
3524.97
2361.78
Y2006 Y2007 Y2008
Baosteelhasactivelyparticipatedinthemergerandreorganizationofdo-
mesticsteelindustry.InBaosteel’sopinion,integrationofsteelindustrycan
notonly eliminate thebackward steel production capacity and achieve
theresultofenergysavingandemissionreduction,butalsopromotethe
development of regional economy and regulate themarket order. For
manyyears,Baosteelhasalwaysconsidered“trulyundertakingcorporate
socialresponsibility”asaprincipletoadvancemergerandreorganization,
andmade great efforts to realize the harmony of economic efficiency,
environmentprotectionandsocialbenefits.
[Note] The Company has started to implement the new Enterprise Accounting Standard since January 1, 2007.
Economic Performance
Merger and Reorganization
25
Baosteel has always considered “truly undertak-ing corporate social responsibility” as a principle to advance merger and reorganization, and made great efforts to realize the harmony of economic efficiency, environment protection and social benefits.
InNovember1998,BaoshanIron&SteelGroupunitedandreorganized
ShanghaiMetallurgicalHolding(Group)Company(briefly“ShanghaiMet-
allurgical”)andShanghaiMeishanGroup(briefly“Meishan”) tobeBao-
steelGroupCorporation.Atthattime,ShanghaiMetallurgicalandMeis-
hanweresufferingthedifficultiesofcapitalshortageandsevereloss.For
instance,in1998ShanghaiNo.1Iron&Steel(Group)Co.,Ltd.,Shanghai
PudongIron&Steel(Group)Co.,Ltd.,andShanghaiNo.5Iron&Steel
(Group)Co.,Ltd.,thethreesubsidiariesofShanghaiMetallurgicaltotally
registeredlossofRMB1.53billion.Afterthereorganizationin1998,due
to the significant increaseof debts and employees, the public doubted
whetherthejointreorganizationwoulddragBaosteeldown.Therefore,in
1999Standard&Poor’sloweredtheratingofBaosteelfromBBB+toBB+
withanegativeprospect,i.e.thereisthepossibilityoffurtherdegradation.
Facingthepublic’sdoubtsandaimingatthemarketneeds,Baosteelmade
re-allocationofcorporateresourcesthroughthemeansofculturalamal-
gamation,strategicunification,businessrestructuring,processesrearrange-
ment,splitandreform,anddebtsreorganization,andthereforeattained
powerfulstrengthandintegratedoperationitsironandsteelmainbusi-
ness.After the joint reorganization, theenterprise’seconomicefficiency
wasrapidlyimproved:thetotalcapitalincreasedfromRMB158.1billionin
1999toRMB193.8billionin2004;thesalesrevenuegrewfromRMB68.4
billionin1999toRMB161.8billionin2004;thetotalprofitincreasedfrom
RMB1billionin1999toRMB21.9billionin2004;thereturnonequity
grewfrom0.69%in1999to12.77%in2004.InDecember2004,Standard
&Poor’sdeclaredthatthenewcreditratingofBaosteelwasBBB+witha
“stable”prospect.ThisreflectedthatStandard&Poor’sfullyrecognizedthe
greatachievementmadebyBaosteel.
During the integration, Baosteel uncompromisingly eliminated the high
energy-consumingandhigh-pollutionbackwardtechnologiesandequip-
ments,andmadetremendousinvestmentinenvironmentcontroltoim-
provetheecologicalenvironment.TheCompanytotallyeliminated8small
blast furnaces and cupola furnaceswith total iron smelting capacity of
1.88million tons; 23 open hearth furnaces, small electric furnaces and
smallconverterfurnaceswithaccumulativesteelsmeltingcapacityof3.75
milliontons;15laggardrollinglineswithtotalsteelrollingcapacityof4.05
milliontons.
Through reorganization and integration, the steel industry resources in
ShanghaiArearealizedoptimizedallocation, layingafirmfoundationfor
Baosteeltoconstructsuperiorsteelproductbase,andleadingtotheover-
allimprovementofChina’ssteelindustry.
OnMarch11,2006,BaosteelandXinjiangBayiIron&SteelCo.,Ltd.en-
teredintoaframeworkagreementonstrategicalliance.OnApril28,2007,
BaosteelGroupXinjiangBayiIron&SteelCo.,Ltd.opened.
Soon after, Baosteel established the Bayi Iron & Steel ProjectTeam to
supporttheupgradeofmanagement,technologyandproduct,andshut
down,suspended,incorporatedandtransformedBayiIron&Steel’splants
ofhighenergyconsumptionandseverepollution.Withsuchefforts,Bayi
Iron&Steelmaderemarkableachievements:thecoldandhotrollingpro-
ductionlineshavebeencompleted;itscontinuousandsteadyproduction
andthehot-sellingproducts jointlypushedaboosttotheperformance
of theenterprise.Theconstructions inNewZoneofBayi Iron&Steel
hadstartedandpressedforward.ThankstotheoperationofNo.1blast
furnace, two coke furnaces and one converter, its production capacity
exceeded 5 million tons in 2008.The production process and energy
structurewereconstantlyoptimizedwhileoutdatedandhighenergycon-
sumingproductsandequipmentswalkedgraduallytotheendoftheirser-
vicelife,including100m3blastfurnace,1.5tconverter,5telectricalfurnace,
500mmrollingmill,three1500m30000oxygenerators,hot-stripset,250
set,3×6.5t/hboileretc.
InMarch2008,theNationalDevelopmentandReformCommissionap-
provedBaosteeltocarryoutthepreliminaryworkofZhanjiang Iron&
Steel Base project. Baosteelwill set up an iron and steel basewith an
annualsteeloutputof10milliontonsonthebasisofmergerandrestruc-
turingofthecurrentShaoguanIron&SteelGroupandGuangzhouIron
&SteelEnterprisesGroupinGuangdongProvinceandeliminationoflow
productioncapacity.
OnJune28,2008,BaosteelGroupGuangdongIron&SteelCo.,Ltd,fund-
edjointlybyBaosteel,State-ownedAssetSupervisionandAdministration
Committee of Guangdong Provincial People’s Government and State-
ownedAssetSupervisionandAdministrationCommitteeofGuangzhou
MunicipleGovernment,wasofficiallyestablished.
Joint Reorganization of Steel Enterprises in Shanghai Merger and Reorganization of Baosteel and Bayi Iron & Steel
Baosteel Group Guangdong Iron & Steel Co., Ltd
Economic Performance Report
26
Environmental Performance Report
Guidedbythedeepconcernforthesocietyandthehumanbeings,Baosteelalwayssethighgoalon
environmentalprotection.Itaimsat“buildingupaworld-topcleansteelenterprise”,andregardenvi-
ronmentalprotectionasoneofitsbasicbusinessforthepurposeofmanagement.
Sinceitwasestablished30yearsago,Baosteelhasalwaysbeenintheleadingpositioninenvironmental
protection,settingamodelfordomesticironandsteelenterprises.In2005,Baosteelwastitledthe“En-
vironmentallyFriendlyEnterpriseofChina”.In2008,Baosteelwashonoredthe“ModelEnterprisefor
CleanandEnvironmentallyFriendlyProduction”byChinaIron&SteelAssociation.Baosteelcontinues
itsenvironmentalprotectionproactivelyagainstthecurrentseveremacro-economictrouble,strength-
enstheenvironmentalimprovementformergedenterprises,improvestheuseefficiencyofenergyand
recyclingrateofwastesandreducesgenerationofwastes.Itfulfillsthescientificdevelopmentconcept
andpromotesthesustainabledevelopmentofthesociety.
Itobserveslawanddisciplineandformulatesandenforcesinternalcontrolstandardsforenvironmental
protectionwhichareevenstricterthanlawsandregulations.Theproportionofinvestmentinenviron-
mentofnewlybuilding,reconstructingandexpandingprojectsshouldbenolessthan5%ingeneral,and
ineachyear,agreatdealofmoneyis investedintechnologicaltransformationanddailymaintenance
ofequipmentsforenvironmentalprocess.Sinceitsoperation,therehasnosevereviolationoflawsand
regulations concerning environmental protection, and all the indicators related to environment and
energyconsumptionareinsteadyimprovement.
Baosteelactivelycommunicatesandcooperateswithdomesticandforeignironandsteelenterprises;
whichenhancestheenvironmentalprotectionofthecompany,introducestheadvancedenergy-saving
and environmental protection technologies andmanagement experienceof Baosteel intoother do-
mesticironandsteelenterprises,drivestheoverall improvementofenergy-savingandenvironmental
protectiontechnologiesinChina’s ironandsteel industryandthusraisestheenvironmentalmanage-
mentlevelofironandsteelenterprisesinChinaandeventheworld.
Atpresent,China’sironandsteelindustryisinthekeyphaseofindustrialrestructuringandrejuvena-
tion.Asthebellwetherinthisindustry,Baosteelundertakestheglorymissionofprovidingthecountry
withwelldeveloped ironandsteel industry.Baosteelwill takethis importanthistoricopportunityto
improvetheequipmentsandtechnologies forenergy-savingandenvironmentalprotection in there-
structuredenterprisesandtheirindicatorsforenvironmentalmanagementperformancebasedonthe
experiencesinrestructuringtheformerShanghaiMetallurgicalandBayiIron&Steelsoastomakegreat
contributionindevelopingChina’sironandsteelindustry.
Building A World-Top Clean Steel Enterprise
It’s Our Duty to Protect Environment
27
Structure of EPRU Commission, Baosteel Co., Ltd.
DirectorChairmanofBaosteelCo.,Ltd.
Committee MembersHeadofEPRUDept.andgeneralman-gersofbranchesandsubsidiaries
OfficeInEPRUDept.
Deputy DirectorGeneralManager
RelevantDeputyGeneralManagerChairmanofTradeUnion
Management Mechanism
BaosteelGroupCorporationentrustsBaosteeltomanageitsenergy-sav-
ingandemission-reductioninaccordancewiththeprincipleofstreamline
structure.
The Environmental Protection and Resource Utilization Committee is
Baosteel’stopadministrativesectorinenvironmentalprotectionandre-
sourceutilization.Itisresponsibleforformulatingrelevantpolicies,guiding,
studyinganddeterminingrelevantdevelopmentproposalsandplans,co-
ordinatingtherelationandresourcedistributionbetweensubsidiariesand
branchesandmakingdecisionsonrelevantmajorprojects.
BaosteelestablishedtheEnvironmentalProtectionandResourceUtiliza-
tionDepartment(EPRUDepartment)tostrengthentheintegratedman-
agementofenergy-saving,environmentalprotectionandcomprehensive
utilization of resources. EPRUDepartment studiesmacroscopically and
implements relevant laws, regulations and policies concerning environ-
mentalprotectionissuedbygovernments,executesprofessionalstandards
ofnationalandlocalgovernmentsconcerningenvironmentalprotection,
energy-savingandcomprehensiveutilizationofresources;formulatesrel-
evantrulesofenvironmentalprotectionandresourceutilizationfromthe
perspectiveofprofessionalmanagementandcompetencymanagement,
Environmental and Energy Management of Baosteel Group Corporation
organizes,plansandformulatesdevelopmentplanningandannualplanof
Baosteelaboutenvironmentalprotection,energy-savingandcomprehen-
siveutilizationof resources;organizesoverall evaluationoverBaosteel’s
environment,organizesandparticipates inthepreparationofBaosteel’s
sustainabledevelopmentreportandBaosteelGroupCorporation’ssocial
responsibilityreport;itisresponsibleforthecentralizedmanagementof
environmentmonitoring andenvironmental pollution control, organizes
investigationandanalysisofthecompany’smajorenvironmentalpollution
accidents; tracksthedevelopmenttrendofcomprehensiveutilizationof
domesticandforeignsecondaryresources,organizesandlaunchesman-
agement improvementandscientificeffortsofcomprehensiveresource
utilization;organizesandconvenestheannualandregularmeetingsofthe
EnvironmentalProtectionandResourceUtilizationCommittee,promotes
andfulfillstheadministrationofenvironmentalprotectionandintegrated
resourceutilization,andadvancetheconstructionofenvironment-friendly
enterprises.
The subsidiaries and branches also established relevant administrative
committeesanddepartmentsofthesamefunctiontojointlypromotethe
company’senvironmentandenergymanagementinaccordancewiththe
requirementsofISO14001environmentalmanagementsystem.
Environmental Performance Report
28
Management Measures
Baosteeladoptscentralizedenergymanagement.Allkeyproductionunits
haveestablishedEnergyManagementCenters(EMS)withdifferentsizes,
andthisishelpfulforthecompanytocomprehensivelymanagetheenergy,
efficientlyrecycleenergyaswellasreducethewasteandfugitiveuseof
energy.
Based on the 20 years’ experience in operation of EMS, the branches
ofBaosteel,byupgradingthetechnologiesandfunctionsconstantly,have
becomeamodel formodernenergymanagementamongthe ironand
steelenterprises.EMSmakestheenergymediumunderunifiedbalance
andcentralizedadjustment,distributionandmanagement. Itcoordinates
thesupplyanddemandofenergymediumamongallunitsat real time
andeffectivelyreducesthedispersion lossofenergymedium,especially
reducing the dispersion rate of blast furnace gas and emission rate of
industrialwastewater.Itreducesthecomprehensiveenergyconsumption
ofbranchesofBaosteel,improvesthecomprehensiveutilizationefficiency
ofenergyandreducestheurbanpollution.
Baosteel,afterreorganizingtheironandsteelenterprisesundertheorigi-
nalBaosteel’sJointReorganizationwithShanghaiIronandSteelWorksand
MeishanIron&SteelCo.,Ltd.,makestechnicalreformsinsuchenterprises
graduallyandestablishesEMSthatmakescontributionstoenergysaving
andemissionreductionoftheenterprise.Baosteel,afterreorganizingthe
XinjiangBayiIronandSteelWorks,isplanningtoestablisheanEMSinit.
TheEMStechnologyofBaosteelhasbeenpromotedinandexportedto
otherdomesticironandsteelenterprises.
As energy saving and emission reduction become increasingly pressing,
“end-of-pipetreatment”isfarfromourdemands.OnlywhenBaosteelre-
alizessourcecontrolandputprecautioncrucialcanitrealizeenergysaving
andemissionreductionandfurtherbecomeaworld-classcleanironand
steelenterprise.Undersuchasituation,Baosteelstrengthensmonitoring
ofenergysaving,establishesan inspectioncompany,extendsmonitoring
fromemissionmonitoring to heat engineering inspection gradually and
monitorstheproductionprocessofallthermalkilns.Sucheffortscontrib-
utetooverallenergysavingofBaosteel.BaosteelInspectionCompany,af-
terlaboratoryassessmentandmetrologyaccreditation,wasauthenticated
asaqualifiedcompanyforthermalinspectionin2008.Thermalinspection
beguntobeappliedtobranchesofBaosteelandbranchesforstainless
steelinthesameyear.Inthefollowingyear,thethermalequilibrationtest
was given to 2500-blast furnace, 100t electrical furnaces and 45t boil-
ersinbranchesforstainlesssteelandtothesteel-pipecircularfurnaces
andconvertersforsteel-makingandroastinginbranchesofBaosteel. In
addition,42 timesof routinemonitoringweregiven to23kilnsof two
branches.Itprovidestechnicalreferencetojudgetheenergyutilizationof
kilns,equipmentstatusandoptimizationofenergymanagementbydevel-
opingthermal inspectionof industrialkilnsandmeasuringthewalltem-
perature, fume temperatureandcomponentsofkilnsandenergy input
andproductoutputandheatprocessparameters.Itenablesthepersonnel
tounderstandtheoperation,energyconsumptionandemissionofkilnsin
siteatanytime.Itfacilitatestheenergymanagementcentertoestablisha
managementindexsystemforenergyconsumptionofkilnandcarryout
standardandscientificmanagementbyaccumulatingandcomparingthe
datafrominspection.
Inrecentyears,Baosteelalsoinvitedexternalunitstoinspecttheindustrial
kilnsandequipmentofBaosteel for judgingtheirefficiency,which laysa
foundationforBaosteeltodevelopenergysavingandemissionreduction
technologies.Baosteelreducestheconsumptionandemissionsofprimaryenergyvia
recyclingofresidualenergy.Theresidualenergyreferstotheenergyac-
quiredfromrecyclingoftheresidualheatandpressure(thatareproduced
duringthecourseofproduction)andinputintothesystem.Thereclaimed
residualenergymainly includeselectricity, steamandconvertergas.The
residualheatresourcesmainlyrefertothesensibleheatfromredcoke,
crudegas,sinteringore,cinderandsteelslag,fumeofheating-furnaceand
steelfeed(slab)andetc.
Thekeyrecoveryplantsandmeasures for residualenergyandheat in-
clude:DryCokeQuenchingTechnology (CDQtechnology), technology
forrecoveringwasteheatfromsinteringproces,technologyforTRTre-
sidualenergypowergenerationbyblastfurnace,recoveringgasandsteam
fromconverter,recoveringresidualheatfromcircularfurnace,recovering
residualheatfromcold-rollingprocessandevaporatingandcoolinginhot
rollingprocess.
Inordertoachieveenergysavingandemissionreduction,itisnecessary
totakemeasureswithfullunderstandingandpurposessothattwiceas
muchcanbeaccomplishedwithhalftheeffort.Inrecentyears,Baosteel
invited external bodies to carry out audit on energy consumption of
Baosteel’sscaledenterpriseswhichconsumeenergy.Inaddition,Baosteel
InspectionCompany,basedontheexperienceintheenergyaudit,was
authenticatedforbeingqualifiedforenergyauditand,accordingtothe
GeneralPrincipleofEnergyAuditon IndustrialandCommercialEnter-
prise,carriedoutenergyauditforsubsidiariesofBaosteelGroupin2007.
Theinspectioncompanyimprovestheenergymanagementsystemand
gives advises on energy savingwith regards to production process by
conscientiouslyanalyzingthestatusquoofequipment,energyconsump-
tionofsequencesandenergycostintheprocessofenterprisesandthe
energyconsumptionindexesofdomesticpeers.
Energy Center Energy Monitoring
Residual Energy Recycling
Energy Audit
29
MainmeasurestakenbyBaosteelinsavingwaterinclude:recyclingwaste-
water, applying a series ofwater saving technologies such aswater re-
sourcedistributionperquality,reasonableutilizationandconcatenateduti-
lization,reducingfreshwateruse,andsavingwaterresourceaseffectively
aspossible.TakingBaosteelbranchesasexamples,theymainlyadoptthe
followingtechnologies:
Concatenated utilization technology. Circulating water system will first
subjecttoreasonabledistributionandwatervolumecontrolsoastoguar-
anteeabalanceinthewholewatersystemandimprovecirculatingratefor
eachsystem.Then,wastewaterdischargedfromeachsystemmaybeused
inaconcatenatedmanner,i.e.,blowoffwaterofpurecirculatingwatersys-
temwillbereplenishedtowastecirculatingwatersystem;blowoffwater
ofwastecirculatingwatersystemwillbereplenishedtogranulatingslag
circulatingsystem,andthenwillbeabsorbedbyslagandbevaporized.As
aresult,thewholewatersystemwillhavenowastewaterdischargeand
willimposenohazardtoenvironment.
Wastewater reusing technology.According to actual situations,Baosteel
developsPinchtechnology,whichisabletoworkoutanoptimumwaste-
water reuse solutionbasedonadequateoperationsandreasonablear-
rangementofwastewater,andattainsawastewaterreuserateofabove
75%.
Neutralized water reusing technology. Baosteel branches originally dis-
charge domestic wastewater through sewage pipeline directly to mu-
nicipalsewagepipelinenetworkwithoutanytreatment.Since1998,Bao-
steelbranchesgraduallyestablishedmorethan30domesticwastewater
treatmentplantswithcapacityabout4milliontons/year, throughwhich,
wastewateraredischargedtofactoryenclosingriverinotherroutes.Since
2001,Baosteelhascarriedoutstudiesonneutralizedwaterreusetechnol-
ogyandsuccessfullyutilizesneutralizedwaterincleancirculatingcooling
watersystemtoreplaceindustrialmakeupwater.Baosteelbecomesthe
firstenterprisewhichutilizesneutralizedwaterinindustrialsystemamong
domesticsteelenterprises.
Itisalong-termstrategytodevelopcycleeconomyfornationaleconom-
ic and social development. Baosteel insists on sustainable development,
spendseffortsonsavingresources,completelypromotescleanproduc-
tion, doubles efforts to develop cycle economy and endeavors to cre-
ateanecologicalsteelenterpriseinharmonywithcitydevelopmentand
environmentalprotection.
Secondaryresources(or“byproduct”,commonlyreferredto“wastes”)
producedduringtheprocessofsteelproductionmainlyincludeblastfur-
nace slag, slag, cinder, fly ash, iron containing dust and industrial refuse.
IndustrialsolidresourcesofBaosteelfeaturelargevolume,diversifiedtype
andcomplexcomponents.Mostofsuchresourcesneedtobetreatedand
comprehensiveutilizedexceptafewofthemcanbedirectlyreturnedto
productionsystem.
Baosteel adopts international and domestic advanced industrial solid
secondary resources treatmentprocess and facilities tomake industrial
solid secondary resources treated in a decremented, resource friendly
andnon-hazardousmanner.Inparticular,throughdevelopmentinrecent
years,afterconstantpromotionofnewtechnologyandprocessandgrad-
ualperfectionofoptimizedconfigurationandreasonabledistributionfor
resources, Baosteel has achieved remarkable results on circulation and
utilization of industrial solid secondary resources, and has preliminarily
formedresourceintegratedutilizationindustry,hasinnovatedaseriesof
selfdevelopedtechnologies,andispreparedforscaleproductioninterms
ofmanagementsystem,technology,humanresource,processequipments
andmarketsales,andespeciallyisquitecompetitiveinnewbuildingmate-
rialandmagneticmaterialfield.
TreatmentandutilizationofBaosteelindustrialsoldsecondaryresources
hasbeenupgradedfromoriginalsimplestorage,disposalandtransporta-
tionforutilizationintocurrentnewtechnicaltreatment,returntoproduc-
tion system and high added value utilization,which effectively prevents
secondarypollutionandturnswastesintowealthandsavesalotofraw
sources.Baosteelhasspenthugeefforts tocreateanecological system
withbeneficialcycleandisalreadyrewardedwithremarkablesocialben-
efits,environmentalbenefitsandeconomicbenefits.
Cyclic Utilization of Water Developing Cycle Economy
Environmental Performance Report
30
Baosteelhasestablishedan independentenvironmentmonitoringorga-
nization tobe responsible formonitoring andanalysisof such itemsas
factory environment quality, pollution source control effect and other
environmentalprotectionrelateditemsforBaosteel(Shanghai)Co.,Ltd.
Baosteel environmentalmonitoring laboratory,with an area over 2000
square meters, is equipped with inductive coupling plasma emission
spectrometer,gaschromatograph-massspectrometer,atomicabsorption
(graphitefurnace)spectrophotometer,FT-IR,smokeandgastester,smoke
anddusttester,andotherlargemonitoringdevices.Thelaboratory,inac-
cordancewithnationalstandards,carriesoutmonitoringof15categories
and297items,suchaswaterdischarge,groundwater,drinkingwater,in-
dustrialcirculatingwater,airandexhaust,indoorair,biology,occupational
health,noise,solidwastes,hotworkingandsoon.Currently,monitored
itemshavebeenexpandedtoecologicalenvironmentanalysisforwaters
atYangtzeRiverEstuary.
BaosteelCo., Ltd. planned toestablish an automaticmonitoring system
from2005andhadcompletedPhaseIofsuchsystembytheendof2007.
PhaseIsystemallowsforon-lineautomaticenvironmentmonitoring,mon-
itoringinformationon-lineinquiryfunction,andonlinereporting,statistics,
inquiryofenvironmentalprotectiondatawithinthescopeofBaosteelCo.,
Ltd.,andinquiryandsharingofinformationregardingenvironmentalpro-
tectionlaws,regulationsandtechnology.In2008,BaosteelCo.,Ltd.initiated
thePhase II constructionof automaticenvironmentmonitoring system,
withservicescoveringMediumandHeavyPlateBranchandNanjingMei-
shanSteelCompanyinadditiontoBaosteelBranch,StainlessSteelBranch,
SpecialSteelBranch,BaosteelChemicalCo.,Ltd.alreadyincludedatPhase
I.PhaseIIprojectisexpectedtobecompletedbyJune2009.
Baosteel always focuses on ecological environment construction of
thefactoryareaandsurroundingareas.BaosteelCo.,Ltd.carriesout
greening construction for the factory areaand surroundingecology
onbasisofnewecologicalgardentheory,andendeavorstocreatean
efficientandgracefulmodernchemicalfactorywithoutanypollution
orwaste.Baosteelbrancheshaveformedamanmadeplantcommu-
nitymainlywithplantedlandscapetoimprovecirculatingfunctionand
landscapequalityforthefactoryareaandsurroundingecologicalenvi-
ronment.Since1991,BaosteelCo.,Ltd.hasbeenawardedasnational
besttrees-plantingorganizationbyNationalAfforestationCommittee
formanytimes,andbeenawardedasShanghai“GardenOrganization”
byShanghaiAfforestationCommittee,andbeenawardedas“theBest
GreeningOrganization”byNationalMetallurgyAfforestationIndustry.
BaosteelGroupXinjiangBayiIron&SteelCo.,LtdislocatedinXinji-
ang,wherethewhetherisdryandsandy,andcloudsofdustarestirred
uponce it iswindy. In order to improve the abominable ecological
environmentsurroundingtheenterprisewhereitiswildandnoplant
grows,allstaffofBaosteelGroupXinjiangBayi Iron&SteelCo.,Ltd
haveplantedmorethan100,000Chineseacresoftreesvoluntarilyat
weekendsforyears,andirrigateaswellasprotectthoseplantedtrees
ThefactoryenclosingriverisariverenclosingthefactoryareaofBaosteel
branch.Ithasatotallengthof20.7kmandhasastoragecapacity(including
stormcollectors)about1.5millionm3.Therivermainlyfunctionstocollect
stormwaterandwastewaterofthefactoryareaandthendischargethem
tooutsideinacentralizedmanner,playingaroleofadjustingpondageand
preventingflood.
Waterresourceofthefactoryenclosingriverismainlyfromproduction
wastewater discharged from production plants after appropriate treat-
ment,domesticwastewaterandstormwater. It is anaturalwater reser-
vationriverandareusablewaterresource. Inordertofurther improve
surrounding environment, and make integrated use of river resource,
Baosteelcarriesoutstudiesonecologicaltreatmentandcomprehensive
utilizationof the factoryenclosing river, andpurifieswaterbodyof the
factoryenclosingriverbymeansofsubsurface-flowwetlandtechnology.
MeishanCompanyofBaosteelGroupinvestedRMB16millionforeco-
logicalenvironmentsafetythatmightbecausedbyganguesiteofmineral
industries.Fromthesecondhalfyearof2005,environmentofHanfushan
GangueSite,whichoccupiesanareaover350Chineseacres,changeda
lotafterthreeyear’sintegratedenvironmentaltreatment:weedandgar-
bagewithin the area no long exist, but are replacedwithmeandering
garden roads and lush greenplants.The greenbelt area reachesmore
than0.2millionsquaremeters.Itoffersvaluablereferencesforintegrated
environmental treatment andutilization for later projectsofHanfushan
GangueSite.In2008,HanfushanGangueSitereclaimationisacceptedby
provincialandmunicipalnationallandresourcesauthoritieswithpositive
praise.
Environment Monitoring
Improvement of Environmental Appearance in Factory Area
Ecological Rehabilitation
withalotofmoneyandenergy,whichchangesthenakedridgeinto
verdantbarriersandachievestopreventwind,rootsand,andpurify
air.BaosteelGroupXinjiangBayiIron&SteelCo.,Ltdplanstoplant
another100,000Chinese acresof trees in future several years and
triestobuildBaosteelGroupXinjiangBayiIron&SteelCo.,Ltdasa
greensteelenterpriseinWestChina.
31
Atthebeginningof2008,ChinaInnovativeStrategicAllianceofAutomotiveLight
WeightTechnologywas founded. It is thefirst strategicalliance that thecoun-
tryintegratesautomotiveindustryandupstreamanddownstreamresourcesfor
sharedtechnicalinnovationandresultshare.BaosteelCo.,Ltd.becomestheonly
steel enterprises among 12member enterprise.The new founded innovative
strategicalliancewillcarryoutbreakthroughsconcerningautomotivelightweight
technologywithinthreeyearssoastoachieveweightforsixmodelsofselfdevel-
opedautomotivesreducedby8%to10%.
Automotivelightweightistoreduceselfweightofautomotiveunderthecondi-
tionofensuringoverallqualityandperformanceofautomotivesinordertomake
automotiveenergysaving,environmentfriendlyandtoimprovecontrollabilityand
safety.Atpresent,suchtechnologyhasbecomean importantstudysubject for
internationalanddomesticautomotiveindustrydevelopment.
Formanyyears,BaosteelCo.,Ltd.hasalwaysbeenkeenondevelopmenttrendof
internationalsteelindustryandautomotiveindustry,andhasparticipatedinthe
“SteelforSuperlightVehicleBody”projectstudyorganizedbyInternationalIron
&steelInstitute,andbecomesthefirsttodevelopsheetsteellaserjointwelding
technology.Thequalityof20newlightweightproductsin3categoriesindepen-
dentlydevelopedbyBaosteelisthesameasthatofforeignsimilarproducts.Inad-
dition,Baosteelhasobtained10patentsandmorethan20proprietarytechnical
secrets.Atpresent,Baosteel’slaserjointweldmentsanddead-hardsteelareina
leadingpositionofmarketshareindomesticmarketandalreadyappliedinmore
than30automotivemanufacturers.
Hotformingtechnologyistheadvancedtechnologyamongautosheetapplica-
tions,andleadsthetrendofautomotivemanufacturingtechnology.Thistechnol-
ogycangreatlyimprovesheetsteelstrengthandparts’dimensionaccuracy,andis
inlinewiththedemandofvehiclelightweight.In2008,BaosteelCo.,Ltd.provided
hotformingvehiclebodypartsampleforCheryAuto.ThetestresultsofChery
showthatBaosteel’shotformingpartsperformanceissuperiortointernational
standard,dimensionaccuracyisremarkablyhigherthanoriginalcoldformingparts,
andweightofpartialvehiclebodyassemblies is reducedby18%.Duetosuc-
cessfulcooperationbetweenBaosteelCo.,Ltd.andChery,manydomesticauto
manufacturersalsosignedsamplepartfabricationagreementwithBaosteel.
Inthefuture,BaosteelCo.,Ltd.willcontinuetodoubleeffortstoapplyselfde-
velopedlaserjointwelding,internalhigh-pressureforming,hotpressformingand
otherleadingtechnologyinselfdevelopedmodelofvehiclesinordertogivefull
playofsampleanddemonstrationroleandtopromotecommondevelopment
ofsteelindustryandautomotiveindustry.
Green Building Automotive Light Weight Technology
Environmental Performance Report
Withincreaseofworldpopulationandaccelerationofurbanization,
humankindsimposemoreandmoreurgentdemandsonresidences
andenvironment.Therefore, International Iron&steel Institutehas
organized and initiated the LivingSteel Project, aiming to seek for
efficient and economical solutions for global residential problems
throughsustainableresidentialdesignandarchitecturalinnovation.
Steelstructureisawardedasthe“greenbuilding”for21stcentury
duetoitsenvironmentfriendlyandsustainablefeatures.Compared
withtraditionalconcretestructure,steel-structureresidentialbuild-
ingsareadvantageousofitsenergysaving,environmentfriendlyand
100%reusablefeatures.Inaddition,steel-structureresidentialbuild-
ingscanbeprefabricatedandassembledonsite,whichwillgreatly
shortenconstructionperiodandeffectivelyreducefoundationcosts.
Steel-structureresidentialbuildingshaveacostsimilartoconcrete
buildings, but aremore catered to the positioning of economical
house.
In2005,BaosteelparticipatedintheLivingSteelProjectastheonly
authorizedmemberinChinaRegion.OnMarch5th2008,thefoun-
dation stone laying ceremony of Baosteel steel-structure demon-
strativeresidenceprojectwasheldinWuhanHuangjinkouQuarter.
All steel columns of the demonstrative project aremade of cold
bendingsquaresteelpipemanufacturedinBaosteel.Comparedwith
traditionalH-shapebarsteel,squaresteelismoreeconomical,and
is the idealproduct for steel used in residential purpose.Thisde-
monstrativeprojectconcernsabouteconomicalhouse,whichaims
tosolvehousingdifficultiesformostfamilieswithlowincome,and
safeguardsqualitylifeforusers.
32
Supply Chain Performance Report
Baosteelstrengthenedcooperationwithusersandotherindustriesineachprocedureofenterpriseoperation,fromprocurementofrawmaterialsand
equipment,toR&D,transport,usageanddisposalofproducts,andenhancedcommunicationwiththesociety.Meanwhile,Baosteelendeavoredtoreduce
theinfluenceofproductionprocessandprojectconstructionontheenvironment,activelypromotedthedevelopmentandproductionofenvironmentally
friendlyproducts,andstrengthenedthepublicityof“Greenoperation”,soastoroottheideassuchasgreendesign,greenmanufacturing,greenmarketing
andgreenproductsdeeplyinthemindofitsemployees.
Green Procurement Chain
Baosteelisthefirsttolaunch“GreenProcurementActionPlan”inthefield
ofpurchasingmaterials,goodsandequipments inChina’s steel industry.
By publicly releasing“Green ProcurementAction Plan” on Baosteel E-
businessplatform,Baosteeldeliversitsgreenprocurementpoliciestothe
publicandenhancestheawarenessofthepublicon“GreenProcurement”.
Incaseofequivalenteffectiveness,Baosteelwillgiveprioritytosupplier’s
productswhichhavebeencertifiedbyISO14001environmentalmanage-
mentsystem,soastoeffectivelyensureenvironmentalprotection,energy
savingandreutilizationofpurchasedmaterialsandgoods,andguidethe
procurementchainontothewayofsustainabledevelopment.
Bysortingoutthepurchasecatalogue,promotingthestandardizationof
purchaseforpaintandothermaterials,andsortingouttheenvironmental
requirementsofpurchasedgoods,thecompanydefinedkeycategoriesfor
greenprocurement,andorganizedusingdepartmentsandtechnicalde-
partmentstooptimizetechnicalstandardsofprocurement,andincorpo-
ratedrequirementsonenergy-savingandenvironmentalprotectioninto
thestandards.Thecompanyimprovedthemanagementonrecyclingma-
terials,integratedandoptimizedthemanagementprocess,andimproved
therecoveryproportionandefficiencyofwastematerialsandpackaging
materials.Thecompanyalsorequireditssupplierstograduallyobtainthe
certificateofenvironmentalmanagementsystems,andasked107suppli-
ersintheindustriesoffireproofmaterials,chemicalandnonferrousmetal
topassISO14001certificationbytheendof2009.
In2008,facedwiththedrasticallychangingexternalenvironmentandbased
onfurtheroptimizationofsupplier’sstructure,thecompany,bysigninglong-
term strategic cooperation agreementswith suppliers, strengthened the
controloverresourcesrisksandsupplyrisks,promotedorderlycompeti-
tiononandnormaldevelopmentofthemarket,providedsecureguarantee
forproduction,operationandprojectconstructionofBaosteel,andrealized
awin-winsituationbetweensuppliersandpurchasers.Inordertobetter
cultivateanddeepenstrategicpartnership,thecompanystrengthenedre-
ciprocalvisitandcommunicationbetweenseniormanagementofsuppliers
With sunshine procurement, Baosteel optimized its procurementmode,
anduseddifferentiatedprocurementwayfordifferentgoodsaccordingto
thematurity levelofmarketcompetition.Baosteelstrengthenedstrategic
procurement for bulk raw fuelmaterials, implemented high added-value
rawmaterialJITmodel,triesconsignmentsales,preparedandreleasedthe
“MeasuresforAdministrationofBiddingProcurementforRawandAuxiliary
Materials”,andpromotedstandardizationandtransparencyofprocurement.
Baosteel deepened cooperationwith suppliers: suppliermanagement: By
vigorouslypromotingBaosteel’sculturewhichtakesintegrityandcollabora-
tionascoreamongvastsuppliers,thecompanyfullyimplementedtheclean
collaborationsystemwithsuppliers,positivelyguidedsupplierstocarryout
legalcompetition insupplyquality,priceanddelivery,andmadevastsup-
pliersdeeply impressedwith thecommitmentofBaosteel tobuilda fair,
honestandstandardprocurement-and-supplyenvironment.Thecompany
strengthenedsocialaccountabilitymanagementonsuppliersofbulkrawfuel
materials,andrequiredISO9000certificationonproductionsuppliers,and
gaveprioritytosupplierswithmoreconsciousnessofsocialresponsibilityif
allconditionswereequal.
Baosteel implemented E-procurement: As an important means of sun-
shineprocurement, thecompanyplanedanoverall functional framework
of E-procurement and stably promoted its implementation step by step.
E-procurementhasnotonlyenabledastandardandtransparentpurchasing
process,butalsobecomeaplatformforestablishingharmoniousrelation-
shipsbetweenBaosteel and its suppliersand improvingprocurementef-
ficiencyby creating value for the companywith the collaborationof the
suppliersandpurchasers.
Green Procurement
Baosteel Strengthened Strategic Operation and Built a Long-Term and Stable Procurement & Supply Chain
Sunshine Procurement
and purchasers, established amechanism for information exchange, and
improvedtechnicalcooperationandsubjecttrainingbetweensuppliersand
purchasers.Intermsofstrategicresourcessuchasironore,coalandocean
shipping, Baosteel signed long-term strategic cooperation agreements
withsuppliersandobtainedbestprocurementefficiencyandmaximized
procurement benefits. Baosteel improved its production-supply-research
mechanism,andkeptimprovingresourceadaptabilityandsupplyguarantee
bypromotingtheproduction-supply-researchprojectssuchastheoptimi-
zationoforeandcoalproportioningstructure.
33
Baosteelisalwaysmarket-orientedandpaysgreatattentiontocustomer’ssatisfaction.Thecompanykeepsoptimizingitsproductmix,strivestoimprove
thequalityandgradeofitsproducts,vigorouslydevelopsenvironmentallyfriendlyproducts,implements“Greenoperation”andinsistsonGreenDevelop-
ment,hopingtobuild“GreenBaosteel”.
Technological innovationisakeywayofBaosteeltoimproveitscorecompetitiveness.Afteryearsofefforts,Baosteelhasdevelopedaseriesofnew
products.Thedomesticmarketshareofqualitysteelproductssuchasautomotivesteel,householdelectricalappliancesteel,pipelinesteel,stainlesssteel,
electricalsteelandpetroleumsteelhasgreatlyincreased.Meanwhile,ithasalsopromotedthedevelopmentofdownstreamindustries,andmadecontri-
butionstovastusers.
Preventing global warming Reducing risks in the management on environmental protection
Creating recycling society
Saving energy and reducing CO2 emission Environmental protection and chemical management
Recycling and prolonging service life
Automobile Light weight and high securityHigh-strengthsheet,wireandbarmaterials
Simplifying user’s processing technologyLasertailored-weldedbland
Environmentally friendly materialsLead-freehotgalvanizedsteelsheetLead-freeeasy-cuttingsteelChromium-freegalvanizedsheetforautomobile
Reducing noise and vibrationVibrationdampingcompoundplate
Prolonging service life and reducing rejects
Hotgalvanizedhigh-strengthsteel(DP)Electro-galvanizedhighstrengthsteel(TRIP,DP)
Food & Beverages Reducing the weight of beverage cansReducingthethicknessofDImaterials
Household electrical appliance
Simplifying user’s processing technologyColorprecoatedsteelusedforhouse-holdelectricalapplianceSelf-bondingcoatedelectricalsteelSelf-lubricatingfilmhotgalvanizedsteelsheet
Improving motor efficiencyHighefficientandnon-orientedelectri-calsteel
Materials containing no environmentally hazardous substances
Lead-freehotgalvanizedsteelsheetChromium-freehotgalvanizedsheetforhouseholdelectricalapplianceChromium-freeelectro-galvanizedsheetforhouseholdelectricalapplianceChromium-freehotAl-ZncoatedsheetforhouseholdelectricalapplianceChromium-freecolorprecoatedsheetforhouseholdelectricalappliance
Prolonging service life and reducing rejects
HotAl-ZncoatedseriesproductsHotgalvanizedseriesproductsElectro-galvanizedseriesproductsColorprecoatedseriesproducts
Electrical power and energy
Improving the efficiency of power generation
High-temperatureandhigh-pressureboilerpipe
Improving the efficiency of energy transport
Highstrengthandhighductilitypipelinesteel
Improving the efficiency of power generationHigh-pressureboilerpipeHighstrengthsteelpipe
Prolonging service lifeSteelforchemicalstoragetanksSteelforpetroleumstoragetanks
Building and Civil engi-neering
Improving the efficiency of constructionHighstrengthandhighductilityplateSteelplateforhighheatinputwelding
Prolonging service lifeHighstrengthenameledsteelHighstrengthstructuralsteelforbuildingsHigh-tensileStrengthwiresSelf-cleaningcolorprecoatedsteelsheetHigh-ductilityandhighstrengthstruc-turalsteelpipeHighstrengthfire-resistantandweather-ingsteelHigh-durabilitycolorprecoatedsteelsheet
Others Simplifying user’s processing technologyHotrolledhighstrengthdiesteelforplasticmaterialsforming
Downstream industry
Environmental benefits
Environmentally Friendly Products
Supply Chain Performance Report
34
[Note 1] RoHS stands for Restriction of Hazardous Substances, and is also known as lead-free compliance. It is a directive issued by EU. As for the electronic industry, it mainly involves the Restriction of 6 kinds of hazardous substances.
[Note 2] SGS: SGS is the abbreviation for SGS-CSTC Standards Technical Services Co., Ltd, a joint venture established in October 1992 by SGS (Switzerland) and China Standards Technology Development Corporation (CSTC) subordinate to the original State Bureau of Quality and Technical Supervision. It is among the first JVs which legally provide inspection, testing, certification & verification services in China.
Baosteelactivelytakesappropriatemeasurestodevelopenvironmentally friendlyproducts.Duringtheprocess
ofproductionandoperation,Baosteelgivesfullconsiderationtobeingharmoniouswiththenaturalecosystem,
triesitsbesttoprotectandimprovepeople’slivingenvironment,andproperlyfulfillsitsresponsibilitytoprotect
environment.
Bycenteringoncleanerproduction,ecologicalconstructionandenvironmentalgovernance,Baosteelmakesevery
efforttodevelopnewtechnologies,newprocessandnewproductsforgreenenvironmentalprotection.Baosteel
isthefirstonewhohaspassedISO14001environmentalcertificationinChina’smetallurgicalindustry.
Baosteeladoptsinternationallyadvancedqualitymanagement.In1995,BaosteeltooktheleadinpassingISO9001
certificationofBritish Standards Institution (BSI). Itsmainproducts havebeen recognizedby international au-
thoritativeinstitutions.Forinstance,theyhaveobtainedUSAPIemblemandJapanJIScertificateandhavepassed
QS9000certificationofworld-famouscarmakersincludingGM,FordandChrysler.Theyhavealsobeenrecognized
byclassificationsocietiesinsevencountries:China,French,USA,UK,Germany,Norway,andItaly.
BaosteelcarriesoutSGS[Note2]environmentalprotectiontestsaccordingtoROHS[Note1]Directive,andimproves
productswhichfail tomeetthisDirective.Finally,BaosteelpreparesSGSreportandLetterofUndertakingfor
relevantproducts(includingcoatingsofvariouscolorsforcolorprecoatedsteel,A/H/Kcoatingsforelectricalsteel,
variouspost-treatmentwaysforhotgalvanizedandelectro-galvanizedproducts).
35
• The corrosion-resisting property of Baosteel newmartensite stainless steel products crossed the
“GreenBarriers”ofEU.
• TheGalvanizedSteelWirefordragline,whichis7millimetersindiameter,1770Mpa,andindepen-
dentlyresearchedanddeveloped,byBaosteelwonMajorInnovativeProjectofChinaIndustry’sNew
Record jointly byCEC (China EnterpriseConfederation) andCEDA (China EnterpriseDirectors
Association).
• BaosteelbecametheonlyoneenterpriseinChinawhichproducesandoffershighstrengthsteelplates
for150000m3extra-largecrudeoilstoragetanks.
• Baosteelnickel–basealloyoiltubing/casingandunderseapipelinetubesbrokeimportmonopoliesand
supportednationalstrategyforenergysecurity.
• ThestainlesssteelpipeforultrasupercriticalpressureboilerindependentlydevelopedbyBaosteelhas
filledthedomesticblank.
• BaosteeldevelopedsuccessfullyT24high-pressureboilerpipes.
• Baosteeldevelopedsuccessfullyextra-highstrengthhotrolledengineeringmachinerysteel.
• Baosteel’senvironmentallyfriendlychrome-freeelectro-galvanizedfingerprintproofsteelsheetwas
awardedas“SecondPriceofNationalEmployees’TechnologicalInnovativeAchievements”issuedby
theMinistryofScienceandTechnology,MinistryofLaborandSocialSecurityandNationalFederation
ofTradeUnions.
• Baosteel’schrome-freeelectro-galvanizedfingerprintproofsteelsheet(SECCN5\SECDN5)waslisted
amongtop10projectsoftransformationofnewandhigh-techachievementsofShanghaiin2007.Its
“extra-deepdrawformedhighqualityautomotivesteel”and“Pipelinesteel(X70,X80)”werelisted
amongtop10insalesvolume,andthechrome-freeelectro-galvanizedfingerprintproofsteelsheet
waslistedamongtop10ingrowthpotential.
• Baosteel’senvironmentallyfriendlychrome-freephosphatedandsealedelectro-galvanizedsteelband
wasidentifiedasLevelAtransformationofnewandhigh-techachievementsinShanghai.
• Baosteelsuccessfullydeveloped600MpahotgalvanizedTRIPsteelsheet,furtherenrichingtheauto-
motivesteelfamilyofBaosteel.
• ThesteelforweatheringtrainbogieproducedbyBaosteelaccordingtoEuropeanrequirementssuc-
cessfullywentaboardandwasexportedtobeusedonIndia’slightrail.
• Baosteeldevelopedsuccessfullydouble-highsurfacefingerprintproofsheet,fillingthedomesticblank
forthishighvalueaddedandhightechnologicalcontentproduct.“Double-highsurface”mainlymeans
high surfacequality andhigh surfaceproperty.Variousproperties suchas corrosion-resistanceand
electricalconductivityareuptohighapplicationstandards.
Excerpts of Media Information on Baosteel Premium Steel in 2008
Supply Chain Performance Report
36
Baosteelisawaysadheringtoitscommitmentof“threeconsiders”:i.e.:Baosteelconsiderscustomer'sstandardasitsownstandard;Baosteelconsiders
customer'splanasitsownplan;andBaosteelconsiderscustomer'sinterestsasitsowninterests.
Baosteel considers customer’s standard as its own standard; Baosteel considers customer’s plan as its own plan; and Baosteel considers customer’s interests as its own interests.
Score of customer’s satisfaction during 2006 to 2008
80
100
90
2006/1 2006/2 2006/3 2006/4 2007/1 2007/2 2007/3 2007/4 2008/1 2008/2 2008/3 2008/4
Score
Quarter
91.89 92.12 92.38 92.2 91.95 92.07 92.45 92.57 92.45 92.31 92.96
90.07
High-Quality Service
Asaglobalpartnerof2010ShanghaiWorldExpo,Baosteelprovidedhigh-
qualitysteelproductsforWorldExpoinaneffectiveandtimelyway.
ThepavilionconstructionofWorldExpoisofhugesteelconsumption,vari-
ousspecificationsandcomparativelyshortdelivery term.Baosteelhas then
establishedtheleadingandworkingteamforWorldExpoprogramtoexert
groupsynergyandintegratedresourceadvantagesoastoinnovatethesupply
mode forkeyprojects implementthepackagecontractualexecution forall
steeldemandandconductonestationserviceincludingproduction,batching,
processingandshipping.
Asoftheendof2008,Baosteelhadsuppliedatotalof85,000tonsteelto
WorldExpo,andproppedupthesteelridgeforthelandmarkingbuilding“one
axisandfourpavilions”includingChinaPavilionandthePerformanceCenter.
In2004,Baosteellaunchedthecustomertechnicalservicerepresentative
system in which customer representatives, coupled with Baosteel’s
marketing platform, would solve problems encountered by customers
in using rapidly, reduce the period of customer service and dispute
settlement, respond to customer’s demand in an 24-hour and zero-
distancewayandprovide“One-stop”one-on-oneconsiderateservice.It
washighlypraisedbycustomers.
In2008,LiYongchun,anemployeeinBaosteelsalescenter,wasemployed
asanexpertofsteelapplicationbyQingdaoHaierCo.,Ltd,andbecame
an honorary employee of Qingdao Haier Co., Ltd. During 3-year
employment period, LiYongchun will participate in procurement and
usageofsteelproductsofHaier.Hewilldirectlytakespartinsteelusage
diagnosisintheprocurementprocessofHaier,helptosortoutexisting
steelproducts inHaier,and integrateHaier’ssteelsupplyresourcesand
process,thusenhancingthesubstitutabilityofsteelproductsandreducing
procurementcosts.
Insiders pointed out that this move showed customers gave full trust
to Baosteel, andwould have a far-reaching influence on improving the
competitiveness of both Baosteel and its customers and leading joint
developmentofupstreamanddownstreamindustries.
BeinglistedamongfirstwinnersofChinaQualityManagementAward,Baosteelstartedthe“Customer’sSatisfactionProgram”since1994.Overyearsofac-
cumulation,Baosteelhaveestablishedacompletesystemforcustomer’ssatisfactionsurveyandimprovement.Bycarryingoutcustomer’ssatisfactionsurvey
quarterly,Baosteelknowsthedetailsinthechangeofcustomer’ssatisfactionandlearnscustomersdemandandcomplaintstimely,sothatitcanputforwards
improvementplananddeterminetheimprovementdirectionforproductsandservicesprovidedtocustomers.Assurveyfindingsshow,Baosteelalways
enjoysahighlevelofcustomer’ssatisfaction.Thescore(100-scorescale)ofcustomer’ssatisfactionduring2006to2008isshowninthefollowingfigure:
Support Shanghai ExpoCustomer Representative System
Customer’s Satisfaction Program
37
GRI Indicator
Descriptionofreportindicators Page
1.1Statementfromthemostseniordecision-makeroftheorganizationabouttherelevanceofsustainabilitytotheorganizationanditsstrategy
1
1.2 Descriptionofkeyimpacts,risksandopportunities 1,8
2.1 Nameoftheorganization 2
2.2 Primarybrands,products,and/orservices 2
2.3Operationalstructureoftheorganization,includingkeydepartments,operatingcompanies,subsidiarycompaniesandJVs
3,44
2.4 Locationoftheorganization’sheadquarters Backcover
2.5 Numberofcountrieswheretheorganizationoperatesandnameofcountries Backcover
2.6 Natureofownershipandlegalform 2,44
2.7 Marketserved 2
2.8 Scaleofthereportingorganization 2,12,24
2.9 Significantchangesduringthereportingperiod,includingscale,structureandownership 24
2.10 Awardsreceivedinthereportingperiod 38
3.1 Reportingperiod Insidefrontcover
3.2 Dateofmostrecentpreviousreport Insidefrontcover
3.3 Reportingcycle Insidefrontcover
3.4 Contactpointforquestionsregardingthereportoritscontents 49
3.5 Processfordefiningreportcontent Insidefrontcover
3.6 Boundaryofthereport Insidefrontcover
3.7 Stateanyspecificlimitationsonthescopeorboundaryofthereport Insidefrontcover
3.8 Basisforreportingonjointventures,subsidiaries,leasedfacilities,outsourcedoperationsandotherentities -
3.9Datameasurementtechniquesandthebasesforcalculations,includingassumptionsappliedtocomplexindictorsinthereportandestimation
-
3.10Explanationoftheeffectofanyre-statementsofinformationprovidedinearlierreports,andreasonsforsuchre-statement
-
3.11Significantchangesfrompreviousreportingperiodsinthescope,boundary,ormeasurementmethodappliedinthereport
-
3.12 GRIcontentindex 37
3.13 Policyandcurrentpracticeswithregardtoseekingexternalassuranceforthereport 9
4.1Governancestructureoftheorganizationincludingcommitteessubordinatetothehighergovernmentbodyandresponsibleforspecialtasks
3,9
4.2 IndicatewhethertheChairofthehighestgovernancebodyisalsoanexecutiveofficer 6
4.3Statethenumberofmembersofthehighestgovernancebodythatareindependentand/ornon-executivemembers
6
4.4Mechanismsforshareholdersandemployeestoproviderecommendationsordirectiontothehighestgovern-ancebody
17
4.5Linkagebetweencompensationofhighestgovernancebodymembers,seniormanagerandadministrativestaffandtheorganization’sperformance
3,14
4.6 Processesinplaceforthehighestgovernancebodytoensureconflictsofinterestareavoided 14
4.7 Processfordeterminingthequalificationandexpertiseofhighestgovernancebodymembers 14,16
4.8Proceduresinthehighestgovernancebodyforoverseeingtheidentificationandmanagementofeconomic,environmentalandsocialperformance,includingrelevantrisksandopportunities,re-statementoforobediencetointernationallyrecognizedstandards,codeofconductandprinciples
9
4.9Proceduresinthehighestgovernancebodyforoverseeingthemanagementofeconomic,environmentalandsocialperformance,includingrelevantrisksandopportunities,re-statementoforobediencetointernationallyrecognizedstandards,codeofconductandprinciples
9
4.10Processesforevaluatingthehighestgovernancebody'sownperformance,particularlywithrespecttoeconomic,environmental,andsocialperformance
14
4.11 Explanationofwhetherandhowtheprecautionaryapproachorprincipleisaddressedbytheorganization 14
4.12Externallydevelopedeconomic,environmentalandsocialcharters,principles.orotherinitiativestowhichtheorganizationsubscribersttoorendorses
2
4.13 Membershipsinassociationsand/ornational/internationaladvocacyorganizations 2
4.14 Listofstakeholdergroupsengagedbytheorganizations 10
4.15 Basisforidentificationandselectionofstakeholderswithwhomtoengage 10
4.16 Approachestostakeholderengagement 10
4.17 Keytopicsandconcernsraisedthroughstakeholderengagementhowtheorganizationhasresponded 10
Descriptionofreportindicators Page
EC1 24
EC2 32
EC3 14
EC4 -
EC5 14
EC6 32
EC7 12
EC8
EC9 24
EN1/EN2 32
EN3-EN7 28
EN8-EN10 29
EN11-EN15 30
EN16-EN25 28,29
EN26/EN27 31,33,36
EN28 26
EN29 32
EN30 26
LA1 12
LA2 13
LA3 14
LA4 17
LA5 17
LA6 15
LA7 15
LA8 17
LA9 15
LA10 16
LA11 17
LA12 14
LA13 12
LA14 14
SO1 21
SO2 23
SO3 23
SO4 23
SO5 -
SO6 -
SO7 -
SO8 22
PR1 33
PR2 33
PR3 36
PR4 36
PR5 36
PR6 22
PR7 -
PR8 36
PR9 22
38
Appendix
Focus on 2008
(1) OnJanuary5,2008,Baosteel’sstainlesssteelprojectwonagoldmetalof“2007ChinaQualityCon-
structionAward’heldbyChinaQualityConstructionAwardEvaluationCommittee.
(2) OnJanuary7,2008,Baosteel’spaperof“EstablishmentandApplicationofDynamicAuditingDecision-
makingSupportingSystem”wonthefirstprizeof2007ShanghaiEnterpriseManagementModerniza-
tionInnovationAchievements.
(3) OnJanuary8,2008,“ANewTechnologyforSafe,EnvironmentallyFriendlyandRecycledSlagGranu-
lation” and“Technology forHigh-strength, Fully-enclosed StraighteningMachine Supporting Rollers”
mainlycreatedbyBaosteel’sChiefResearcherXiaoYongliandChiefOperatorWangJunrespectively
wonthesecondprizeofNationalAwardforTechnologicalInventionsandNationalAwardforScientific
andTechnologicalProgress.
(4) OnJanuary22,2008,Baosteel’sfiveachievementswonprizesofShanghaiMunicipalAwardsforScien-
tificandTechnologicalProgressandShanghaiMunicipalAwardsforTechnologicalInventions.ATechnol-
ogyofSelf-IntegrationofHot-dippingAl-ZnCoatingProcesswonthefirstprizeofShanghaiMunicipal
AwardsforScientificandTechnologicalProgress.TheDevelopmentofHigh-quality,Large-section,Non-
Quenched/TemperedPlasticDieSteelSeriesProductswonthesecondprizeofShanghaiMunicipal
AwardsforTechnologicalInventions;AnewAODProcessforStainlessSteelMakingandResearchon
NewProcessofWide-spacing,CentralizedPillarlessMiningwonthesecondprizeofShanghaiMunicipal
Awards for Scientific andTechnological Progress; and theDevelopment ofAutomotive 55SiCr and
55SiCrVHighStrengthSpringWireRodwonthethirdpriceofShanghaiMunicipalAwardsforScientific
andTechnologicalProgress.
(5) OnMarch5,2008, threesubjectsofBaosteel, i.e.: theApplicationofRegenerativeLadlePreheating
Technology,Water-SavingProgramduringthe“10thFive-YearPlan”PeriodofBaosteel’sSpecialSteel
BranchandApplicationofPower-savingTechnologyinWaterPumpsandCoatingProcessinBaosteel’s
Branches;respectivelywonthefirst,secondandthirdprizeofShanghaiEnergySaving&PollutionRe-
ductionOutstandingAchievementsAwards.
(6) OnJune17,Baosteelwonthetitleof“AdvancedEnergySavingUnitofShanghai2007”.
(7) OnJuly10,2008,Baosteelwasconferredwith“CorporateSocialResponsibilityContributionAward”
in the“Forum forHarmonious Society Construction andCorporate Social Responsibility (Pudong
Shanghai)2008”.
(8) OnJuly28,2008,BaosteelGroupCorporationandShanghaiBaosightSoftwareCo.,Ltdandother89
companieswereofficiallyappointedbytheMinistryofTechnology,State-ownedAssetsSupervisionand
AdministrationCommission(SASAC)andAllChinaFederationofTradeUnions(ACFTU)asthefirst
batchofexperimentalenterprisesforinnovationinChina.
Awards
39
A p p e n d i x
(9) OnJuly30,2008,Baosteelwasawardedthehonorarytitleof“ChinaIron&SteelIndustryCleanPro-
ductionandEnvironment-FriendlyEnterprise2007”byChinaIron&SteelAssociation(CISA).
(10) OnAugust30,2008,ChinaEnterpriseConfederationandChinaEnterpriseDirectorsAssociationjointly
publishedtheupdatedrankingofTop500ChineseEnterprises.BaosteelGroupCorporationranked
firstamongTop500ChineseManufacturingEnterprises.ItwasalsothefourthtimeforBaosteeltotop
thelistsincetheappraisalofTop500ChineseManufacturingEnterpriseswasinitiatedin2005.
(11) OnOctober30,2008,ShanghaiContractCreditPromotionCommission (SCCPC)announced the
Shanghai2006-2007listofContract-honoringandPromise-keepingEnterprises,and13companiesof
BaosteelwereawardedasAAA-gradeContract-honoringandPromise-keepingEnterprises.
(12) OnDecember3,2008,theawardingceremonyof“TheCorporateSocialResponsibility(CSR)Ranking
inChina”sponsoredbyChinaBusinessNewswasheld inShanghai,duringwhichBaosteel received
“OutstandingEnterprisesAward”.
(13) InDecember2008,Baosteelreceivedthespecialcontributionawardof“2006ChinaCharityAward”
heldbytheMinistryofCivilAffairsofthePeople’republicofChina.
(14) On January 9, 2009,TheComprehensiveTechnology forUtilization and EmissionReduction of By-
ProductGasesofSteelEnterprisesofBaosteel’sbranchwonthesecondpriceof2008NationalAwards
forScientificandTechnologicalProgressatthenationalscientificandtechnologicalawardingmeeting.It
wasthefirstitemwiningsuchhonorindomesticmetallurgicalindustry.
(15) In July2008,XuLejiang,ChairmanofBaosteelGroupCorporationwashonoredtobeoneof“Top
10OutstandingFiguresinChineseEconomy2008”jointlybytheAssociationofChinaEconomicPress
(ACEP),ChinaEconomicInformationMagazinePressoftheEconomicDaily,andChinaIndustryand
CommerceTimes.
(16) InOctober2008,Baosteelwon5.12EarthquakeReliefOutstandingContributionAwardbyShanghai
RedCross.
(17) InJanuary2009,Baosteelwonthe2010ShanghaiWorldExpoServiceStarAwardbytheBureauof
ShanghaiWorldExpoCoordination.
(18) InMarch2009,BaosteelGroupwaslistedamong“World’sMostAdmiredCompanies”byAmerican
“Fortune”Magazine.
(19) InMarch2009,Baosteelwonthetitleof“Top10EnergySavingandPollutionReductionEnterprisesin
China2008”jointlybyACEF(All-ChinaEnvironmentFederation)andChinaEnterpriseNewspaper.
40
OnJan.5 The2007NationalQualityConstructionAwardwasannouncedintheGreatHallofthePeople.BothBaosteel’sstainlesssteelprojectandtheNo.4BlastFurnaceProjectofBaosteel’sBranchwonthegoldenprize.
OnJan.8 Baosteel’s “A New Technology for Safe, EnvironmentallyFriendly and Recycled SlagGranulation” and“Technology forHigh-strength,Fully-enclosedStraighteningMachineSupportingRollers”respectivelywonthesecondprizeofNationalAwardforTechnological InventionsandNationalAward forScientificandTechnologicalProgressat the2007national scientificandtechnologicalawardingmeeting.
OnJan.9 ZhangDejiang,MemberofthePoliticalBureauoftheCPCCen-tralCommittee,beingaccompaniedbyYuZhengsheng,Mem-berofthePoliticalBureauoftheCPCCentralCommitteeandSecretaryof the ShanghaiMunicipalCommitteeof theCPC,inspectedBaosteel.
InJan. Baosteelwonthetitleof“2007MostTrustworthyEnterpriseinChina” jointlybyChinaAssociationofEnterprises (CAE)andChinaEntrepreneurAssociation(CEA).
OnFeb.4 2008AnnualCelebrationofBaosteelTalentAwardwasheldinShanghaiOrientalArtCenter.
OnFeb.7 WangLequan,memberofthePoliticalBureauoftheCPCCen-tralCommitteeandSecretaryofXinjiangUygurAutonomousRegionalCommitteeoftheCPC;NurBekri,ChairmanoftheXinjiangUygurAutonomousRegion,AligenYiminbahai,directoroftheStandingCommitteeoftheNationalPeople’sCongress,AshatKerimbay,ChairmanofthePeople’sPoliticalConferenceoftheautonomousregion,andotherleadersfromtheautono-mousregionvisitedBayiSteel.
OnFeb.27 Thewide-plate rollingmill of Luojing Projectwas completedandputintooperation.
OnFeb.27 Thefirst2500m3furnaceofBaosteelGroupXinjiangBayiIron&SteelCo.,Ltdwasputintooperation.
OnFeb.28 TheCentralGovernmentdesignatedBaosteelasoneofpilotenterprisesforstudyandpracticeactivitiesamongstate-ownedenterprises.
InFeb. The first blue book for intellectual property strategy amongChineseenterprises-”BlueBookofBaosteel’sStrategyforIntel-lectualProperty”finisheditscompilation.
InFeb Baosteel’sEG(electrolyticgalvanized)productshaspassedthecertificationoftheworldfamousGermanMercedes-Benz.
OnMar.17 TheNationalDevelopment & ReformCommission (NDRC)approved the Development and Reform Commission ofGuangdongProvince andBaosteel to carryout theprepara-toryworkofGuangdongZhanjiangIron&SteelBaseProject.Accordingtothestate’srequirements,Baosteelwillbuilda10milliontonsteelbaseinZhanjiangonthebasisofmergingandrestructuringShaoguanIron&SteelGroup(SGIS)andGuang-zhouIron&SteelEnterprisesGroup(GISE),theexistingsteelenterprisesinGuangdongProvince,toeliminatetheoutdatedcapacity.
OnMar.21 No.4GeneratorSetatBaosteelPowerPlant-thefirstlarge-ca-pacity,low-heatvaluegasFully-Firedonce-throughboilerturbogeneratorsetintheworld-wassuccessfullyconnectedintothepowergrid.
OnMar.28 ChinaStateShipbuildingCorporation(CSSC),BaosteelGroupCorporationandChinaShippingheldthesigningceremonyofaletterofintentforcooperationinshipbuildinginLongxueShip-buildingBase.
InApr. Themobilizationmeeting of Baosteel’s activities for in-depthstudy and practiceof scientific outlookon developmentwasheld, symbolizing the formal launchofBaosteel’s activities forstudyandpractice.
InApril Thecold-rolledsheetshapecontroltechnologyindependentlydevelopedbyBaosteelhasascendedtotheworld-leadinglevel.Baosteelwascapableofputtingthesystemintotheliveproduc-tionenvironment.
Highlights of the Year
41
OnJune14 Jacob Zuma, SouthAfrica’s rulingAfrican National Congress(ANC)visitedBaosteel.
OnJune21 NPC environmental impact assessment law enforcement in-spection group ledbyChenZhili, vice-chairmenof theNPCStandingCommittee,cametoBaosteelforinspection.
OnJune25 Baoshan Iron & Steel Co., Ltd. announced that the issuanceofRMB10billiondetachableconvertiblebondsapprovedbyChina Securities Regulatory Commission (CSRC) had beencompletedonJune20withacouponrateof0.80%.OnMay28,CSRCapprovedBaoshanIron&SteelCo.,LtdtoissuepubliclyRMB10billiondetachableconvertiblebonds,withaparvalueofRMB100andatermof6years.
OnJune28 BaosteelGroupGuangdongIron&SteelCo.,Ltd,withBaosteelasitsbiggestshareholder,wasestablished.WangYang,MemberofPoliticalBureauof theCPCCentralCommitteeandPartySecretaryofCPCGuangdongProvincialCommitteeattendedtheunveilingceremony.ThiscompanyisjointlyinvestedbyBao-steelGroupCorporation,State-ownedAssetsSupervisionandAdministrationCommission(SASAC)ofGuangdongProvinceandSASACofGuangzhouCity,markinganinterimachievementaccomplished for the assets restructuring of BaosteelGroup,Shaoguan Iron&SteelGroup (SGIS) andGuangzhou Iron&SteelEnterprisesGroup(GISE).
OnJuly4 The detachable convertible bond issued by Baoshan Iron &Steel Co., Ltd. was successfully listed on Shanghai Stock Ex-change,withTickerSymbolof“08BaosteelBond”.“08Baosteelbond”istradedbymeansofsecurityaccounttrusteeship.Un-derwrittenbyCITICSecurityCo.Ltd.,andguaranteedbyBao-steelGroupCorporation, thebondwasgivenAAAratingbyChinaChengxinSecurityRatingCo.,Ltd.theattachedwarrantswerealsolistedatthesametime.
InMay AftertheGreatSichuanEarthquake,Baosteelimmediatelytookactionstomakevariousdonationstotheearthquake-strickenarea,withatotalamountreachingRMB117millionYuan.
OnMay15 Baosteel’sorientedsiliconsteel linesuccessfullyproducedthefirstrollofacceptableorientedsiliconsteelsheet.
OnMay28 YuZhengsheng,MemberofPoliticalBureauoftheCPCCen-tralCommitteeandPartySecretaryofCPCShanghaiMunicipalCommitteeandShenJun,ViceMayorofShanghaiwenttothecolorcoatingworkshopofBaosteelBranch’sColdRollingPlantto learn about the production of color-coated sheets badlyneeded for the fabrication of light mobile houses for earth-quakevictims.
OnMay30 Thethinnestandfastestlinesforsheetsintheworld-thecon-tinuous annealing line and No.2 electrolytic tin plate line ofBaosteel Branch’s Cold-rolled Steel Sheets Plant successfullyreachedthedesignedindexesforoutput,quality,profitanden-ergy consumption after 9months and7months respectivelysincebeingputintoproduction,breakingthefastestrecordoflikelinesintheworldtoreachthese4indexes.
InMay ApprovedbytheStateCouncil, the12thmeetingof thefirstsessionofboardofdirectorsofBaosteelGroupCorporationdecidedtoemployHeWenboastheGeneralManagerofBao-steelGroupCorporation.
InMay TheresultofappraisalofthefirstyearlyChinesebenchmark-ing green corporations was announced. The appraisal wassponsored jointlybyChinaEntrepreneurMagazine,PriceWa-terhouseCoopersandClimateChangeCapital.Baosteelwasoneofthe20benchmarkingcorporationsduetoits3leadingindictors: environmental cognition and policy, environmentalperformanceandsocialparticipation.
InMay The trial production of 1400 MPa level super high strengthheavyplate,representingtopworldlevel,wassuccessfulinBao-steel.The product performances fulfilled all the technologicaldesignstandards.Baosteel thussucceeded infilling thegap indomesticproductionofsuperhighstrengthheavyplate.
InMay Baosteel finished 2008Annual Report onOverall RiskMan-agementofBaosteelGroupCorporation. Inorder to furtherpromoteCentral Enterprises to deepen overall riskmanage-ment,theState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncil(SASAC)launchedpilotproj-ectsof“2008AnnualReportonOverallRiskmanagementofCentralEnterprises”,andBaosteelwasamongthefirst31pilotenterpriseswiththeboardofdirectors.
A p p e n d i x
42
OnAug.28 TheState-ownedAssets Supervision andCommissionof theState Council officially issued the operation performance as-sessmentresultoflargestate-ownedenterprisesin2007,Bao-steelGroup, togetherwithother39 largestate-ownedenter-prises,wasratedLevelA.
OnAug.30 OnAugust 30th, China Enterprise Confederation and ChinaEnterpriseDirectorsAssociationjointlypublishedtheupdatedrankingofTop500ChineseEnterprises.Boasting theoperat-ingrevenueofRMB227.716billion,BaosteelGroupCorpora-tionranked12thamongTop500ChineseEnterprisesandfirstamongTop 500 Chinese Manufacturing Enterprises. Baosteelranked10thamongtheBest200ChineseEnterprisesinTermsofProfitand15thamongtheBest200ChineseEnterprisesinTermsofTaxPaid.
OnSep.19 BaosteelLargeDiameterLongitudinalWeldingPipeProductionLinewasofficiallyputintoproduction
OnSep.26-28The third Baosteel Biennial Academic Conference was held.XuKuangdi,formervicechairmanofChinesePeople’sPoliticalConsultativeConference (CPPCC)andPresidentof theChi-neseAcademyofEngineeringattendedthisconference.
OnOct.7 Afterenteringthefourthquarter,theglobalsteelmarketturneddown sharply due to theU.S. financial crisis. Baosteel held amobilizationmeetingforQ4operatingsituation,urgingBaosteelpeople to take emergency actions to actively copewith thechangeonthemarket.
OnOct.18-20ThemainconstructionmaterialsworthRMB4.5milliondonat-edbyBaosteelto“KunlunStation”,China’sfirstAntarcticInlandResearchStation,wereloadedontothe“SnowDragon”.
OnOct.19 Baosteel’s84itemswonprizesonthe6thChinaInternationalInventionExhibition,withahighestaward-winning rate in thehistory,whichexceeded75%.
OnOct.31 HuaJianmin,vicechairmanoftheStandingCommitteeoftheNational People’sCongress, being accompanied byYangDin-ghua,ViceChairmanofStandingCommitteeofShanghaiMu-nicipalPeople’sCongress,cametoinspectBaosteel.
InOct The stainless steel pipe for ultra supercritical pressure boilerindependently developed by Baosteel successfully passed thetechnicalrevieworganizedbyShanghaiPowerEquipmentRe-searchInstitute(SPERI).
InOct theState-ownedAssetsSupervisionandAdministrationCom-missionoftheStateCouncil(SASAC)promulgatedtheevalua-tionoutcomeoftheinformationizationapplicationlevelofthecentralgovernment-ownedenterprises: the informationizationapplication level index of Baosteel in 2007 is 92.28 reachingLevelA.
OnJuly5 Inthe“ForumforHarmoniousSocietyConstructionandCor-porate Social Responsibility (Pudong Shanghai) 2008”, jointlyheldbyChineseAssociationofProductivityScience(CAPS)andPudongNewArea, Baosteel was conferredwith“CorporateSocialResponsibilityContributionAward”.
OnJuly9 TheAmerican Fortunemagazine issued the latest ranking oftheWorldTop500Companies.With totaloperatingrevenueofUSD29.939billionandaprofitofUSD2.858billionin2007,Baosteeljumped48placesfromlastyeartorankNo.259.
OnJuly13 LiChaoyuan,amemberofthePoliticalBureauoftheCentralCommitteeoftheCommunistPartyofChina,SecretaryoftheSecretariatoftheCentralCommitteeandHeadoftheOrga-nizationDepartmentoftheCPCCentralCommitteecametoBaosteel to investigatethepilotwork,andbelievedthatBao-steelhadimplementedtheoverallrequirementsoftheCentralCommitteeonunifyingunderstanding,improvingcapability,solv-ingproblemsandinnovationmechanism.Thestudyandpracticeprogram lasted for five and a halfmonths, and all talksweresuccessfullycompletedonAugust15.
OnJuly24 BaosteelestablishedaSteelDevelopmentPlanningCommittee.ItisBaosteel’sfirstspecialcommitteeorientedtowardsunifiedplanningofthecompilation,argumentattheearlierstageandevaluationoftheimplementationofsteeldevelopmentplanofBaosteelGroup.BaosteelGroupGeneralManagerHeWenbowasappointeddirectoroftheCommittee.
OnJuly25 Baosightwas honoredoneofChinaTop10 Innovation Soft-wareEnterprises2008byChinaSoftwareIndustryAssociation(CSIA).
OnJuly26 Xu Lejiang, Chairman of Baosteel Group Corporation washonoredtobeoneof“Top10OutstandingFiguresinChineseEconomy2008” jointlybytheAssociationofChinaEconomicPress,(ACEP),ChinaEconomicInformationMagazinePressoftheEconomicDaily,andChinaIndustryandCommerceTimes.
OnJuly28 BaosteelGroupCorporation,ShanghaiBaosightSoftwareCo.,Ltdandother89companieswereofficiallyappointedby theMinistry ofTechnology, State-owned Assets Supervision andAdministrationCommission(SASAC)andAllChinaFederationofTradeUnions (ACFTU) as the first batch of experimentalenterprisesforinnovationinChina.
OnJuly30 Inthe4thSessionofthe3rdExecutiveCouncilofCISA,Bao-steelwasawardedthehonorarytitleof“ChinaIron&SteelIn-dustryCleanProductionandEnvironment-FriendlyEnterprise”,anditshighgradesteelsheetforpassengercarwon“ChinaIron&SteelIndustryProductDevelopmentandMarketPioneeringAward”.
InJuly Baosteeltooktheleadinstarting“GreenProcurementActionPlan”onpurchasingmaterialsandsparepartsindomesticsteelindustry.Baosteelwill givepriority to the supplierswhohavepassedISO14001environmentalmanagementsystemcertifica-tion.
43
OnDec.3 Theawardingceremonyof“TheCorporateSocialResponsibil-ity(CSR)RankinginChina”sponsoredbyChinaBusinessNewswas held in Shanghai, during which Baosteel received“Out-standingEnterprisesAward”.
OnDec.13 LiKeqiang,memberofthestandingcommitteeofthePoliticalBureauoftheCentralCommitteeoftheCPCandvicepremieroftheStateCouncilcametoinspectBaosteel,duringhisinspec-tion,thevicepremiercalledonBaosteeltoplayaleadingroletomakemuchmorecontributionsforthedevelopmentofnationalindustriesandcausesofenergysavingandenvironmentalpro-tection.YuZhengsheng,memberofPoliticalBureauoftheCen-tralCommitteeof theCPC, Secretary of ShanghaimunicipalcommitteeoftheCPC,HanZheng,ViceSecretaryofShanghaimunicipalcommitteeoftheCPCandmayorofShanghaimu-nicipality,accompaniedthevicepremierduringhisinspectionofBaosteel.
OnDec.22 Grandcelebrationwasheld for the30thanniversaryofBao-steel.WuBangguo,MemberofthePolitburoStandingCommit-teeof theCPCCentralCommitteeandNPCChairman,andZhangDejiang,MemberofthePoliticalBureauoftheCPCCen-tralCommitteeandVicePremieroftheStateCouncilrespec-tivelysentamessageofcongratulation.YuZhengsheng,Mem-berofthePoliticalBureauoftheCPCCentralCommitteeandSecretaryof the ShanghaiMunicipalCommitteeof theCPC,Chen Jinhua, FormerVice-Chairman of CPPCC, Li Rongrong,SASAC Director and Party Committee Secretary attendedthe celebration.HanZheng,Deputy Secretary of the Shang-haiMunicipalCommitteeof theCPCandMayorofShanghaiNur Bekri, Deputy Secretary of XinjiangUygurAutonomousRegionalCommitteeoftheCPCandChairmanoftheXinjiangUygurAutonomousRegion,andHuangYunlong,MemberoftheStandingCommitteeoftheGuangdongProvincialCommitteeoftheCPCandFirstViceGovernorattendedtheceremony.Intheceremony,Baosteeldecidedtoaward6comrades,includingformerChairmanofBaosteelGroupLiMing,thetitleof“Bao-steelMeritFigure”.
OnDec.26 At the 1st anniversary of the contract signed between theBureauofShanghaiWorldExpoCoordination (BSWEC)andBaosteel.Thelatter’sbrandofcolorcoatedsheetstateditsviewattheceremony.Deputysecretary-generalofShanghaigovern-mentanddirectorgeneralofBSWEC,HongHao,deputydirec-torgeneralofBSWEC,ChenXianjin,deputysecretaryoftheCPCBaosteelcommittee,OuYangYingpeng,vicepresidentofBaosteelCo.Ltd, theunveilingceremony forBaosteel’sbrandofcolorcoatedsheetwasheld,OuYangYingpeng,deputysec-retaryoftheCPCBaosteelcommittee,andHongHao,directorgeneralofBSWECstarteduptheunveilingphotosphere.Theobjective vision and connotation of the brand, namely,“con-struct a colorful life”, as well as solutions of construction bysteelstructurewereelaboratedrespectivelybyZhouShichun,generalmanagerofBaosteelSalesCenter,andCaoPing,vicegeneralmanagerofBaosteelMetals.
InDec. Despiteoftheabruptchangeinmarketsituation,Baosteelhaskeptitsleadingroleinautomotivesheetproductionandsales..Thetotalsalesvolumeofthewholeyearincreased9.7%overthesameperiodofthepreviousyear.Thesalesofhighstrengthsteelandouterpanelincreased31%and25%respectivelythanlast year.The sales volume of each of these varieties for thewholeyearaccountedformorethan60%marketshare.
InDec. Baosteelsucceededinproductionoftopgradeofsiliconsteelthroughits1550mm-PL-TCMby“skippinglevel”.Thankstothis,BaosteelbecametheveryfirststeelmakerinChinaandoneoffewsteelmakersintheworldthatpossessesthetechnologyofthisprocess.
OnNov.13 YuZhengsheng,amemberoftheStandingCommitteeofthePoliticalBureauoftheCommunistPartyofChina(CPC)Cen-tralCommitteeandSecretaryofCPCCommitteeofShanghaiMunicipality,CametoinspectBaosteel.
OnNov.22 WenJiabao,amemberoftheStandingCommitteeofthePo-liticalBureauoftheCommunistPartyofChina(CPC)CentralCommittee,premieroftheStateCouncilcamedowntoBao-steelforaninspection.BeingaccompaniedbyYuZhengsheng,amemberoftheStandingCommitteeofthePoliticalBureauoftheCommunistPartyofChina(CPC)CentralCommitteeandsecretaryofCPCCommitteeofShanghaiMunicipality,ZhangPing,ChiefofNationalDevelopmentandReformCommissionof theStateCouncil,LiYizhong,ministerofMinistryof Indus-tryandInformationTechnologyofthePeople’sRepublicChina,ZhangXuren,ministerof theMinistryofFinance,XieFuzhan,chief of ResearchOffice of the State Council, Liu Mingkang,chairmanofChinaBankingRegulatoryCommission,HanZheng,MayorofShanghaiMunicipality.PremierWenJiabaogaveasuf-ficient affirmativecomplimenton themethodsandmeasuresthat Baosteel takes to deal with themarketing adversities inacalmmannerandthedecentspiritualfeaturesthatBaosteelbears foruncompromisingdevelopmentof itsown.WenalsoencouragedBaosteelpeople tobemoreconfident in copingwiththeilleconomicdeclinetoobtainabetterdevelopmentindeed.
OnNov.24 Baosteel set up a Social ResponsibityCommittee,which is aspeicalcommitteeresponsibleforoverallcoordinationfortheconstructionofBaosteel’ssystemandworkingmechanismforperforming social responsibilities.HeWenbo, BaosteelGroupGeneralManagerwasappointedasthechairmanofthecom-mittee.
OnNov.28-30 TheExpertCommitteeofGuangdongIron&SteelGroupCor-poration, with Xu Kuangdi, former vice chairman of ChinesePeople’sPoliticalConsultativeConference(CPPCC)andPresi-dentoftheChineseAcademyofEngineeringaschairman,wasestablishedinGuangzhou.
InNov HaibaoShippingCompany,co-investedbyBaosteelandChinaShippinghelditsunveilingceremony.
OnDec.1 Inorder to reward foreignexpertswhohasmadeoutstand-ing contribution to Baosteel’s project construction, operationmanagementandR&Dand technological innovation,Baosteelspecially set up the Cooperation ContributionAward, whichconsistsoftheAwardofBestCooperation,theAwardofOut-standing Contribution and theAward of Best Supervisor. 10foreignexpertshavebeenselectedasthefirstawardwinners.
OnDec.1 Baosteel won the title of Excellent Creation Corporation ofChinaIndustry’sNewRecordjointlybyCEC(ChinaEnterpriseConfederation)andCEDA(ChinaEnterpriseDirectorsAsso-ciation).Allthe30itemsselectedbyBaosteelwerenominatedinChinaIndustry’sNewRecord.
A p p e n d i x
44
Baosteel Group Guangdong Iron & Steel
Co., Ltd
BaosteelGroupGuangdong Iron&SteelCo.,
Ltd isanextra-largegroupcorporation incor-
porated in Guangzhou City in June 28, 2008
jointlybyBaosteelGroupCorporation, State-
ownedAssetsSupervisionandAdministration
Commission(SASAC)ofGuangdongProvince
and SASAC of GuangzhouCity, with a regis-
tered capital of RMB 35.86 billion yuan. Bao-
steel Group Corporation contributes in cash
and holds 80% shares. SASACofGuangdong
ProvinceandSASACofGuangzhouCitycon-
tributewiththenetstate-ownedassetsofSGIS
andGISEandhold20%sharescollectively
BaosteelGroupGuangdong Iron&SteelCo.,
LtdisleadinginthesteelindustryinGuangdong
province, and is responsible for guiding and
drivingthedevelopmentoftthesteelindustry
inGuangdongProvince,tobuildaworld-class,
green and environmentally friendly steel pro-
tectionbaseandaR&Dbaseforsteelproduct
application technologies and environmental
protection and energy saving technologies, so
astocreatemostvalueforshareholders.
Address:Floor24,CCBGuangdongBuilding,NO.509,DongfengZhonglu,YuexiuDistrict,Guangzhou
Postalcode:510045Tel:+8602083606666Fax:+8602083606095
Baoshan Iron & Steel Co., Ltd
Baoshan Iron & Steel Co., Ltd. (Baosteel Co.,
Ltd.)hasestablished its standingof theworld-
class steel complex in the global steelmarket,
thanks to its comprehensive superiority in the
fieldsofintegrity,talent,innovation,management
and technology. Its comprehensive competi-
tivenessranks third in theworldsteel industry,
according to the assessment of the“Guide to
WorldSteelIndustry”,andthecompanyistaken
asoneofthemostpromisingsteelmakersrichin
growthpotentials.
Baosteelhasbeenspecializedintheproduction
ofthehigh-techandhighvalue-addedsteels,in-
cluding the automotive steel, shipbuilding steel,
oilandgasminingsteel,pipelinesteel,appliance
steel, silicon steel, boiler steel, pressure vessel
steel, foodandbeveragepackagingsteel,metal
productprocessingsteel,stainlesssteel,specially
alloyedsteelandlivingsteelaswell.Notonlyhas
Baosteeltakentheleadinthesupplyofavari-
etyof steels in thehomemarket, but its steel
products also have been selling well to over
40 countries and regions such as Japan, South
Korea, Europe and USA. Based upon the up-
to-datetechnologiesinvolvingmodernironand
steelmetallurgy,hotrollingandcoldrolling,hy-
draulicandsensing,electroniccontrol,computer
and informationandcommunication,Baosteel’s
equipment is featuring the large scale and the
continuousandautomaticfunctions,andremains
asmodernastheworld-classtechnology,bythe
means of continued technical revamping and
upgrading.BaosteelCo.,Ltd.appliestheinterna-
tional advanced quality management practices,
andgotallitsmajorsteelproductscertifiedby
theinternationalprestigiousauthoritativeinstitu-
tions.
Address:SouthBuilding,BaoshanHotel,No.1813,MudanjiangRoad,BaoshanDistrict,Shanghai
Postalcode:201900Tel:+862126645000Saleshotline:+862126648888Fax:+862126649000Website:www.baosteel.com
Baosteel Group Xinjiang Bayi Iron & Steel
Co., Ltd
BaosteelGroupXinjiangBayiIron&SteelCo.,
Ltd(withXinjiangBayiIronandSteelCo.,Ltdas
itspredecessor,“BayiSteel”)wasfirstfounded
inSeptember1951.Itwasoriginallyabackbone
state-owned enterprise and key tax payer in
Xinjiang.InlateApril,2007,Baosteelacquiredit
andbecameitscontrollingshareholder.
BayiSteelnowhasanannualcapacityof7.45
milliontonsteel.In2008,itproduced4.84mil-
liontonsteel. Itplanstoproduce5.50million
tonthisyear.AfterbeingacquiredbyBaosteel
Group,itsequipmentlevelandproductionca-
pacity have greatly increased as a number of
newprojectshavebeenputintoproduction.
Its products are dominated by construction
steelproducts.Steelsheetandplate,high-qual-
ity steel andmetal products also account for
certainproportion.Itsproductshaveanimpor-
tantpositioninXinjiangmarket. Inadditionto
Xinjiangmarket,theyarealsosoldtoprovinces
suchasGansu,ShaanxiandSichuan,aswellas
fiveCentralAsiancountries.
Address:BayiRoad,Toutunhe,Urumqi,Xinjiang,ChinaPostalcode:830022Tel:+8609913893418Fax:+8609913891000Website:www.bygt.com.cn
Steel Industry
Introduction to Business Segments
45
Baosteel Metal Co., Ltd
BaosteelMetal Co., Ltd. (BaosteelMetal) is a
Baosteel’swholly-fundedsubsidiary,whichcame
intoexistenceafterBaosteelGroupintegrated
itsformerbusinessdevelopmentcompany,steel
products unit, automotive trade business and
wire product business in order to vigorously
develop the steel rolling and processing busi-
nessbytheendof2007.Itplaysanimportant
role of Baosteel’s steel rolling and processing
business.
BaosteelMetals’s core business includes: steel
structure,metalpackagingmaterialsandindus-
trialgas.
Theproducts and servicesof the steel struc-
ture business have almost covered all appli-
cation fields of steel structure.The business
scope includes:ClassAarchitecturalengineer-
ing design; Class A metallurgical engineering
design; lump-sum contracting of architectural
engineering and metallurgical engineering de-
sign;design, fabricationand installationofvari-
ous steel structures; cold-rolled section steel;
highfrequencyweldedHsteel;industrialdoor;
light-weightsteel-framehouses(includingcolor
platehouses);andcold-rolledribbedrebar.Itis
alreadyinfluentialinthedomesticandinterna-
tionalmarketsandhasachievedsomeachieve-
ments.
Baosteel Resources Co., Ltd
Baosteel Resources Co., Ltd. (Baosteel Re-
sources), formerly BaosteelTrade Co., Ltd., is
oneof theBaosteel’swholly-fundedsubsidiar-
ies. Foundedon July21,2006, it ismainlyen-
gagedintheinvestment,tradeandlogisticsfor
mineralresourcesincludingironore,coal,alloy,
non-ferrousmetal, stainless rawmaterials and
scrapsteel.
Baosteel Resources deals with iron ore and
metallurgical auxiliary materials including fine
ironore, lumpore,pellet, limestone,dolomite,
serpentine, olivine; coals including coking coal,
richcoal,PCIcoal,powercoal, lumpcoaland
metallurgicalcoke;stainlesssteelrawmaterials
includingnickel,nickel iron,chromium,chromi-
umiron,ruddlenickelore,chromiumore;and
scrapsteelsincludingcutmaterial,baledmate-
rial,cleanscrap.
BaosteelResourcesisnowbuildingacompre-
hensive logistics service platform with power
competitivenesstoofferscomprehensivelogis-
ticsservicessuchasshipmentagent,forwarder,
railway shipment, warehousing and storage,
loading and unloading at port. It has logistics
subsidiariessuchasQingdaoBaohanTransport
andTrade Co., Ltd. It has also expanded the
ocean-going transportation through the stra-
tegiccooperationwithChinaShippingGroup.
Address:17Fl.,BaosteelTower,No.370PudianRoad,PudongDistrict,Shanghai
Postalcode:200122Tel:+862158350000Fax:+862168403528Website:www.baosteelresources.com
Themetal packagingmaterials aredominated
bysteel two-piececansandcolorcoated tin-
plates.Thecompanyhasestablishedlong-term
strategic partnership with world-famous en-
terprises including Coca Cola and Pepsi. By
2012,itwillbecomethebiggestmakeroftwo-
piececans inChina.BaosteelMetalalsohasa
domestically-leadingUVmetalliccolorprinting
line,andisaleadingenterpriseinmetalliccolor
printinginfood&beveragefield.
Its industrial gas mainly includes oxygen, ni-
trogen, argon, hydrogen, and carbon dioxide.
Thebusiness is dominatedby theproduction
ofliquefiedgasandbottledgas,completedby
thedevelopmentandproductionofhydrogen,
carbondioxide,medicalgas,specialgasandrare
gas.These industrial gases are widely used in
manyfieldssuchasmetallurgy,steel&iron,pe-
troleum,chemical,electronics,andmedicalcare.
Address:No.2building,Lane803,ShuangchengRoad,BaoshanDistrict,Shanghai
Postalcode:200940Tel:+862161805678Fax:+862161801188Website:www.baosteelmetal.com
Resource Development Steel Processing
A p p e n d i x
46
Shanghai Baosteel Industry Inspection
Corporation
ShanghaiBaosteelIndustryInspectionCorpora-
tion(BIC),theformerShanghaiBaosteelEquip-
ment Survey Company, was founded in 1994,
andisBaosteel’swholly-ownedsubsidiary.
ThebusinessscopeofBICmainlyincludes:pro-
viding professional inspection and equipment
diagnosis service with high-tech content and
value-added to modern industrial enterprises,
operational service backed up by professional
technology,andvalue-addedserviceforrelated
technologiesandequipmentandproducts.BIC
hasinternationallyadvancedinstrument,relative-
lycompleteprofessionalqualifications,aswellas
technologicallyadvanced laboratoryandstrong
R&Dcapability. Since itsestablishment,BIChas
made significant contributions to Baosteel in
termsofsteadyoptimizationfortheproduction
chain operation system, quality control system
and scientificmanagement system through ef-
fective application of inspection and diagnosis
technologies.
Address:No.335MeipuRoad,BaosanDistrict,Shanghai
Postalcode:201900Tel:+862156787471Fax:+862156787580
Shanghai Baosight Co., Ltd. (Baosight)
ShanghaiBaosightCo.,Ltd.(Baosight)isalisted
softwareenterprisewithBaosteelCo.,Ltd.Con-
trols as its biggest shareholder.The company
was founded inApril 2000, and was listed in
April2001,headquarteredatShanghaiPudong
ZhangjiangHigh-TechPark,witharegistercapital
ofRMB262millionYuan.
Baosightadherestotheoperationphilosophyof
“ITserviceisintendedtoimprovethevalueof
information”.With30-yearexperiencesinserv-
ingBaosteel,thecompanyiscapableofprovid-
ing: information solutions, automation system
integration and operation and maintenance
for steelmaking enterprises, city intelligent traf-
ficcomprehensivesolutionandcomprehensive
monitoring for road, bridge, channel and track
traffic,andtheelectro-mechanicalpackageprod-
uctandoperationandmaintenanceaswell. Its
productsandsolutionsarefoundinmanyindus-
triessuchasmetallurgy,traffic,equipmentmanu-
facturing(includingshipbuilding),miningindustry,
finance,coal-chemical,andpublicservice.
Inrecentyears,Baosighthasowned150patents,
143 registered software products, 261 regis-
tered software copyrights and 110 identified
technological secrets. It have undertakenmany
keytechnologicalandproductprojectssuchas
NDRChigh-techindustrializationdemonstration
project,863ProgramoftheMinistryofScience
and Technology and electronic development
fundprojectof theMinistryof Information In-
dustry.In2007and2008,Baosightwashonored
asoneofChinaTop10InnovationSoftwareEn-
terprisesbyChinaSoftwareIndustryAssociation
(CSIA)for2consecutiveyears.
Address:No.515GuoshoujingRoad,ZhangjiangHigh-TechPark,PudongDistrict,Shanghai
Postalcode:201203Tel:+862150800830Fax:+862150800701Website:www.baosight.com
Shanghai Baosteel Engineering & Equip-
ment Co., Ltd (BSEE)
Founded in1999,ShanghaiBaosteelEngineer-
ing&EquipmentCo., Ltd. (BSEE) is awholly-
ownedsubsidiaryofBaosteelGroupCorpora-
tion.
The company has national A-level qualifica-
tioninmetallurgicaldesign,architecturaldesign,
project consultation, consultation of project
costandprojectsupervision,andhasrightsto
undertakeoperationofforeign(overseas)proj-
ects. Ithandlesanextensivescopeofbusiness
ranging fromsteel industry tonon-ferrous in-
dustry,lightindustry,chemicalindustry,machin-
ery, transportation, energy and environment.
The company has 7 business departments
withpowerfulcapability in thedesignofmet-
allurgicalprocessandequipmentandadozen
ofsubsidiariesthatareabletoprovidethede-
signandmanufactureoftopclassmetallurgical
equipment,Thecompanyhasmorethan1000
full-timedesigners, andboastsof strong tech-
nologicalstrength.
Address:No.2510TieliRoad,BaoshanDistrict,Shanghai
Postalcode:201900Tel:+862166786678Fax:+862156604813Website:bsee.baosteel.com
Technology Services
47
Fortune Trust & Investment Co., Ltd
Founded in November 1994, Shanghai No.5
SteelWorksInternationalTradingCo.,Ltdisthe
predecessorofFortuneTrust&InvestmentCo.,
Ltd(FTIC).InMarch2007,BaosteelGroupac-
quiredits100%stakebymeansofequitytrans-
fer,andchangeditsnameinto“FortuneTrust&
InvestmentCo.,Ltd”.
FortuneTrust& InvestmentCo., Ltd ismainly
responsibleforoptimizingtheexistingfinancial
resources of Baosteel, improving the value of
equity,andcarryingonequityinvestmentbusi-
ness by using the advantages of Baosteel in
fund,scale,andsynergyofupstreamanddown-
streamresources.
Thebusinessscopeofthecompanyincludesin-
vestmentinmetallurgyandrelevantindustries,
investmentmanagement, investment consulta-
tion, and business consultation. Its business is
mainlyorientedfor :seekinginvestmentoppor-
tunities in thefinancial industry; using itsown
funds to make long-term equity investment
in the financial industry, upstream and down-
stream steel industries, new energy, etc;mak-
ingmid-termstrategic investment forPre-IPO
andprivateplacementandnewshareplacingof
listedcompanies;performingcashmanagement
for itsownfundsbymeansofsubscriptionof
newshares,repurchaseoftreasurybonds,and
bankdeposit;andactivelycarryingonequityin-
vestmentbusiness.thecurrencymarketwitha
riskslightly lowerthanthecapitalmarket,and
tries its best to become a new type finance
investmentconglomeratewithstrongcompeti-
tivenessinChina’sfinancemarket.
Address:7/F,PuDianRoad370,PudongNewDistrict,Shanghai
Postalcode:200122Tel:+862138506666Fax:+862168403999Website:www.huabaotrust.com
Baosteel Development Co., Ltd
BaosteelDevelopmentCo.,Ltd(BaosteelDe-
velopment)isoneofBaosteel’swholly-funded
subsidiaries, with Baosteel Group Enterprise
Development Corporation as its predeces-
sor. In October 2007, Baosteel Development
Co.,LtdwasfoundedbyreorganizingBaosteel
Group Enterprise Development Corporation,
andwasputintoformaloperationonJanuary
1,2008.
Ithassetupthreedivisions,i.e.IndustrialProp-
ertyBusinessUnit,FactoryOperationBusiness
Unit,ResourceRecyclingBusinessUnit,and22
tier-1businessunits.Itsbusinessscopeincludes:
Disposingwastes generated from steelmaking
processes in a harmless way; comprehensive
utilizationof resources;manufactureand sales
of new-type building materials, magnetic ma-
terials,andSlagPowder;productiveoperation
outsourcing; equipment and facility mainte-
nanceandrepair ;steelproductpacking;manu-
facture of packagematerials;meal and bever-
agesupply;propertymanagement;commuting
bus;landscapeandgreeningmaintenance;road
cleaning;warehousing; logistics; steel trade;die
steel processing; distribution; further process-
ing of steel; automotive repair ; environmental
protection,medical care; physical examination
foremployees;hotelmanagement;tourismand
laborprotectionservices.
Address:No.889,BaoyangRoad,BaoshanDistrict.Shanghai
Postalcode:201900Tel:+862156125101Fax:+862156122654
Baosteel Group Shanghai No.1 Iron & Steel
Co., Ltd
BaosteelGroupShanghaiNo.1Iron&SteelCo.,Ltd
isawholly-ownedsubsidiaryofBaosteel.InMay2005,
itscoresteelbusinesswasincorporatedintoBaosteel
Group.Thesecondarylinesofbusinessandcorebusi-
nesswereseparatedsuccessfully,andwoulddevelop
together.
The business scope of the company is mainly in-
tendedforthestainlesssteelbusinessunit.Currently
ithas6segments:(1)Furnacemaintenancebusiness:
forbuildingandmaintenanceofindustrialfurnacesof
thestainlesssteelbusinessunit,including150Tcarbon
steelconverter,100Telectricalfurnace,120Tstainless
steelconverter,ladle,refiningladleand260Ttorpedo
tankcar;(2)Productionsupportingbusiness:forsup-
portingservicesforproduction,includingsteelpacking,
travelingcrane,loadingofrawmaterials,slagfield,de-
phosphorization anddesulphurization, pumphouse,
wastewatertreatment,preservationandmaintenance
forpipelines,aswellasrefrigerationandfirewarning;
(3)Transportationbusiness: fortransportation, load-
ingandunloadingof rawandauxiliarymaterials, in
–processproductsandfinishedproducts;(4)Com-
prehensiveutilizationofresources: includingdisposal
ofcarbonsteelslagandstainlesssteelslag,scrapsteel
processing, processing of Ni-containing waste and
sales of rejectedmaterials andwastes; (5) Logistics
services:includingdinning,greening,propertymanage-
ment,sanitationwork,buscommutation,andhealth
care;and(6)processingandmanufacturingbusiness:
mainly includingmudmilling, theprocessingofdust
settlingpocketandpackingmaterialsandtheproduc-
tionofmilitarybulbsteel.
Thecompanyhassetupanintegratedmanagement
system of “quality, environment and occupational
health and safety” according toGB/T 19001-2000,
GB/T24001-2004andGB/T28001-2001,hopingto
obtaincontinuoussatisfactionofcustomers,employ-
ees,andthesociety.
Address:No.868,ChangjiangRoad,BaoshanDistrict,Shanghai
Postalcode:200431Tel:+862156825810Fax:+862126033237
Finance Production Services
A p p e n d i x
48
Baosteel Group Shanghai Meishan Co.,
Ltd.
Baosteel Group Shanghai Meishan Co., Ltd
(BaosteelMeishan) is awholly-owned subsid-
iary of Baosteel group. In 2005, it started to
operateindependently,beingcompletelysepa-
ratedfromthemainbusinessofsteel.
The business scope of Baosteel Meishan in-
clude:Mining;oredressing;metallurgy,smelting,
rolling and processing of ferrous metal; lifting
machinery installationandmaintenanceof lift-
ing machinery, production and transport of
slagandchemicalproducts(excludinghazard-
ous substances); comprehensive utilization of
resources,collaborativeservicesforsteel.Cur-
rentlyithasmorethan10professionalqualifica-
tioncertificates,including:Level-Aqualification
ofShanghaiCityonClass IandIII0equipment
maintenanceandlevel-AlicenseofthePeople’s
RepublicofChinaonspecialequipmentinstalla-
tionandmaintenance.Inaddition,thecompany
has4keyrepairingtechnologies,i.e.:submerged
arcoverlaywelding,OpenArcOverlayWeld-
ing,Oxygen-acetylenesprayweldingand laser
remelting and 13 overlay welding lines inde-
pendentlydesignedandinstalled.Itiscapableof
testing andmonitoring thewhole production
processofrawmaterialsandsteelproducts.
Address:NewlybuiltoutsideZhonghuamen,NanjingCity,JiangsuProvince
Postalcode:210039Tel:+862586363055Fax:+862586363099Website:www.bsmeishan.com
Baosteel Group Shanghai No.5 Iron & Steel
Co., Ltd
WithShanghaiNo.5Steelworks,whichwasfound-
ed in 1958, as its predecessor, Baosteel Group
ShanghaiNo.5Iron&SteelCo.,Ltdisalargestate-
owned enterprise specializing in development,
productionand salesof special steelproduction.
It joinedBaosteelGroup inNovember1998. In
May2005,thesteelbusinessofthecompanywas
acquiredbyBaosteelGroup,andthecompanybe-
cameawholly-ownedsubsidiaryofBaosteel,with
aregisteredcapitalofRMB781million.
Thebusinessscopeofthecompanyincludespro-
ductionservices, logisticsandwarehousing, scrap
steelprocessingandlivingservices.Whilesparing
noefforts to support thedevelopmentof steel
business, the company strives tomake it bigger
andstronger.In2008,thecompanybuilt2mod-
ernindoorwarehouses,withatotalfloorareaof
50,000m2, andanoutdooryardwithanareaof
80,000m2.Itssubsidiary-BaosteelGroupShanghai
No.5 Iron&SteelLogisticsCo.,Ltd-has195ve-
hicles, an inland terminaldepotwith a lengthof
155m,13railwaylineswithatotallengthofdedi-
catedrailway lineof6kilometers,and2 internal
combustionlocomotives.Currently,ithasbecome
the transaction warehouse designated for na-
tionalsteelfutures(ferrousmetal).BaosteelGroup
ShanghaiNo.5 Iron&SteelCo.,Ltd(including its
subsidiariesandentrustedcompanies)has3773
serviceandmanagementstaffforproductionand
logistics.Thequalityofemployeeshasbeenover-
allimprovedthrough,forexample,competitionin
jobskills.Thecompanyhas1.04millionm2stock
landand450,000m2stockhousestodevelopand
utilize. In addition, themetal products, and steel
productsforbridgecablesentrustedbyBaosteel
GroupShanghaiNo.2Iron&SteelCo.,Ltdtothis
company are also leading in the same industry,
andwinpraises.BaosteelGroupShanghaiNo.10
Iron&SteelCo.,Ltd,subordinatetothiscompany
makes most use of the existing resources, and
sparesnoefforttobuildthenewinnovativeindus-
tryclusterarea,andachievesbusinessrevenueof
morethanRMB75million.
Address:No.303,TongjiRoad,BaoshanDistrict,Shanghai
Postalcode:200940Tel:+862126032130Fax:+862156671316
Baosteel Group Shanghai Pudong Iron &
Steel Co. Ltd
BaosteelGroupShanghaiPudongIron&Steel
Co.Ltd(formerlyShanghaiNo.3SteelWorks)
wasfirst founded inMarch1913,andwasre-
constructedintoShanghaiPudongIron&Steel
(Group) Co., Ltd inMay 1996. InNovember
1988,afterthegreatallianceofsteelenterprises
inShanghai, it joinedBaosteelGroup,andbe-
cameawholly-fundedsubsidiaryofthelatter.
In order tomeet the requirements ofWorld
Expoandtheurbanconstructionanddevelop-
mentofShanghai,PudongIron&SteelCo.Ltd
made theplan tomove its factory toLuojing
according to the overall plan of Shanghai ur-
banconstructionandthestrategicorientation
ofBaosteelGroup.InOctober2007,thePhase
1projectwascompletedandput intoopera-
tion.OnApril1,2008,LuojingassetsofPudong
Iron&SteelCo.LtdwasacquiredbyBaosteel
Group,andBaosteelHeavyPlateMillwas set
up.Thesecondarylinesofbusinessandrelevant
functionaldepartmentsoftheoriginalPudong
Iron&SteelCo.Ltdwerereorganizedintothe
existingBaosteelGroupShanghaiPudongIron
&SteelCo.Ltd.
The business scope of the company mainly
includes production supporting services and
logistics services. In particular, it includes: sup-
porting services for the production areas for
ironmaking, steelmaking, steel rolling and en-
ergy;supportingservices inwarehousing,trav-
elingcrane,invoiceissuingandcertificatemak-
ing,weighting,fuelfilling,sampleprocessing,fire
fightingandairconditioning,municipalmainte-
nance,wasteutilization;logisticsservicessuchas
dinning,propertymanagementandbuses;and
salesofwastes.
Address:No.777,BeichuanRoad,BaoshanDistrict,Shanghai
Postalcode:200949Tel:+862126098983Fax:+862168879116
49
ThankyouforreadingthisBaosteelSocialResponsibilityReport2008.Baosteelisgreatlyconcernedaboutyourcommentsand
opinions,sothatwecanimprovethereportaccordingly.
Pleasefaxtheformto+86-21-68403773afterfillingthequestionnaire.
Or,pleasemailitto:PublicRelationsDepartment,BaosteelTower1101,PuDianRoad370,PudongNewDistrict,Shanghai
1.Haveyoufoundalltheinformationyouneedinthisreport?
2.YourcommentsandopinionstothisReport:
YourpersonalInformation:
Name:
Occupation:
E-mail:
Phone:
Reader’s Feedback Information Form
50
Corporate Communication Department, Baosteel Tower 1101, Pu Dian Road 370,Pudong New District, Shanghai
2 0 0 1 2 2ForStamp
Followthefoldline(2)
Followthefoldline(1)
Thisreportisreleasedafterseekingopinionsfromstakeholdersthroughmanyways
includingtheinternal4Dsystem,thewebsiteforcustomersatisfactionsurveyandthe
companywebsite.Stakeholdersallrespondpositivelytothisreport.However,dueto
thelimitoftime,wehaveyetnotcollectedenoughopinionsfromstakeholderswhen
thereportisprinted.Youropinionsarewelcomed,sothatwecanimprovethisreport
accordingly.Hereissomefeedbackformourstakeholders:
This is the first social responsibility report of Baosteel Group, which is a good be-
ginning. The report discloses key responsibility practices desired by stakeholders in
an all-around, objective and timely way. This report provides full and accurate data,
with good format and clear structure. The column “Highlights of the Year” is well
designed, and helps readers to fully know the social responsibility work of Bao-
steel…It is preferable if each section is properly distinguished according the logics
of target, institutions, measures, performance and typical cases.
——Zhong Hongwu, director of the corporate social responsibility research center
of the Chinese Academy of Social Sciences
With this report, we can fully and systematically understand the efforts and achieve-
ments made by Baosteel Group in terms of social responsibility. We are pound to
have such a partner!
——Liu Li, deputy general manager of Guangdong Galanz
This report fully and clearly shows the efforts and achievements made by Baosteel
in performing social responsibilities, greatly promotes the setup of a good corpo-
rate image of Baosteel. Meanwhile, Baosteel incorporates the ideas of “performing
social responsibilities “into its management practice, which meets the requirements
of scientific outlook on development on sustainable development.
——Hong Zengli, Director of the head office of procurement of Dongfeng Com-
mercial Vehicle Company
Baosteel not only considers social responsibility as an obligation of the enterprise,
but also considers it as a big opportunity for the development of the company. It
shows that Baosteel aims at both the economic benefits of the enterprise and social
benefits, and sets up an example in improving the comprehensive competitiveness
of the steel industry. This report enables us to fully know the efforts Baosteel makes
to fulfill social responsibilities, and is worth reading.
——Shao Zhimin, director of the Office of General Manager of Shanghai Heavy
Machinery Plant Co., Ltd
It is suggested that Baosteel make a statistic on the proportion of employees from
minorities, overseas returnees, female employees and the disabled accounting for
the total number of its employees, so as to show the harmony of all nationalities,
and diversification of the enterprise. This is paid increasing attention in advanced
enterprises in other countries, and is considered as a symbol of being liberal, open,
humanistic and people-oriented. It is also suggested to add more information on
the establishment of Baosteel driving the development of Baoshan community, For
example, comparing old and new photos and various data. In addition, the informa-
tion on Baosteel directly participating in the “development of the West Regions”
should also be added, such as acquiring Bayi Iron & Steel Co., Ltd, and establishing
Chengdu Baosteel Can Making Co., Ltd and Chongqing cutting center.
——Jia Yanlin, General Manager of Baosteel Metals
ThisReportwastranslatedbyChinaTransla-
tionandPublishingCorporation,Translation
andInterpretationProjectSponsorofEXPO
2010ShanghaiChina
Baosteel Group CorporationBaosteel Tower, Pu Dian Road 370,
Pudong New District, Shanghai
Tel: 021-5835 0000 / 5835 8888
Fax: 021-68404832
Postal Code: 200122
http://www.baosteel.com
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