International steel rail production giant British Steel is reborn

British Steel was reborn in 2020, after Hebei Jingye Steel acquired the struggling UK steelmaker. It quickly turned losses into profits after 9 consecutive years of losses, which not only saved more than 4,700 employees of British Steel and its upstream and downstream industrial chains 2. The employment of more than 10,000 people has revitalised the assets of British Steel and made it rejuvenated.

Jingye Steel acquires shares in British Steel

This British steel firm is the UK’s second-largest steel company headquartered in Scunthorpe, UK. Due to problems such as insufficient capacity utilisation and excessive cost burden, it has been operating poorly in recent years. In 2017, it was temporarily profitable. However, due to the uncertainty of Brexit, its customer orders have been greatly reduced, and the United States has imposed additional tariffs on EU steel and aluminium. Tariffs, the company fell into financial distress and declared bankruptcy in May 2019. At the end of 2019, Jingye Steel, a private steel company in Hebei, acquired 100% of British Steel for £53 million, and the delivery was completed in March 2020.

How British Steel Turned Around: Multi-pronged Reform Measures

Less than a year after the acquisition of Jingye Steel, British Steel turned losses into profits after nine consecutive years of losses. In 2021, its production of iron, steel, and timber will be 2.368 million tonnes, 2.521 million tons, and 2.008 million tons respectively, an increase of 29.5%, 36.1%, and 44.5%, respectively, compared with 2019. In 2021, British Steel sold a total of 2.264 million tons of steel, of which 1.273 million tons were sold in the UK and 991,000 tons were exported. The sales revenue was 1.47 billion pounds, an increase of 300 million pounds or 27.2% over 2019. From January to July 2021, It made a cumulative profit of 16 million pounds. Later, due to the stalemate of the epidemic, rising energy prices, and rising carbon emission transaction costs, the profit situation fluctuated, but the overall operating situation was improving. The improvement of the acquired steel group’s production and operation has benefited from several powerful reform measures of Jingye Steel:

1. Boosting the UK Steelmaker’s Efficiency: Cost Control & R&D

Jingye Steel combines the actual situation of British Steel and introduces domestic business experience, such as introducing budget management in production organisation, optimising unit cost and manufacturing cost control, introducing the concept of quota, and minimising and controlling labour costs. By taking back outsourced business, changing unreasonable contract terms in terms of electricity and energy, improving equipment utilisation, saving energy, and reducing emissions. Elaborately integrate various production service systems of British Steel to create an integrated production, supply, and marketing system suitable for British Steel.

It has achieved a total of more than 62 million pounds in efficiency gains and cost reductions. Taking product research and development as its core competitiveness, it has developed a series of new products such as the world’s top S460 high-strength steel and 1100 material for the crane rail. While consolidating the original sales channels of British Steel, it actively explored new markets. After taking over, it won the order of 610 tons of section steel for export to Malaysia, which inspired the confidence and enthusiasm of the UK steel giant’s team.

2. Synergy Between Jingye and the Acquired Steel Firm

British Steel has 150 years of experience in producing high-end varieties of steel and has sufficient steel varieties to meet the needs of different users. Jingye Steel makes full use of its existing resources, exerts its advantages of scale and integration, and optimizes British Steel’s material procurement, production organization, and product sales channels so that it can regain its competitiveness with a new value chain. At the same time, Jingye Steel has cultivated and trained talents for the production and operation of various types of steel through this acquisition and has reserved strength for the transformation and upgrading of internal production capacity. British Steel has rich experience in raw material management control, harmful element control, and smelting model establishment, which provides important support for Jingye Steel’s technological transformation and product upgrade.

3. People-orientated, inclusive and cohesive.

After acquiring British Steel, Jingye Steel respects local culture, strictly abides by local regulations, always conducts operations higher than British environmental protection standards, and operates in a market-orientated manner in accordance with international practices. Guarantee the jobs of the original employees, unify the thinking, take turning losses into profits as the first goal, and improve the efficiency of management decision-making. Drawing on domestic experience, we put epidemic prevention and control and employee safety first, formulated strict prevention and control measures, and persuaded all employees to abide by them, effectively ensuring the health and safety of employees and normal production and operation activities.