According to data from the World Steel Association (WSA), Shagang Group's crude steel production reached 40.54 million tons in 2023, making it the second-largest producer globally, trailing only Baowu Iron and Steel Group, Angang Group, and Hesteel Group. This places Shagang as the sixth-largest steel producer in the world, fourth in China, and first among private enterprises.
According to data from the World Steel Association (WSA), Shagang Group's crude steel production reached 40.54 million tons in 2023, making it the second-largest producer globally, trailing only Baowu Iron and Steel Group, Angang Group, and Hesteel Group. This places Shagang as the sixth-largest steel producer in the world, fourth in China, and first among private enterprises.
On June 30, 2024, Shagang Group announced the passing of Shen Wenrong, chairman of the Board of Directors of Jiangsu Shagang Group. He passed away at age 78.
Born into a farming family, Shen Wenrong dedicated nearly five decades to building Shagang Group into China's largest private steel group. As of the end of Q1 2024, Shagang Group's net assets totaled 111.714 billion yuan. The company reported an annual operating income of 157.072 billion yuan for 2023 with a net profit of 2.226 billion yuan.
Like many self-made billionaires, Shen Wenrong—Shagang Group's true leader—has had a legendary entrepreneurial journey."
In the 1970s, a surge in the establishment of steel mills swept through the south of Jiangsu. Shen Wenrong's gin factory also constructed a steel rolling workshop, which gained independence in 1975 and served as the precursor to Shagang Group. In 1984, Shen Wenrong assumed the role of director at the steel factory.
Despite being referred to as a steel mill, it may be more aptly described as a "workshop" in terms of scale and technology. The transformation of this small workshop into today's private iron and steel empire is closely tied to two key principles championed by Shen Wenrong.
The first principle involves substantial investment and taking risks on technological advancements. For instance, in 1988, when faced with potential failure at the investment factory, Shen Wengrong introduced a 75-ton ultra-high power electric furnace for steelmaking from the United Kingdom. This move led to continuous casting and continuous rolling short-process production line implementation that significantly enhanced output and product quality at the factory. Simultaneously, by focusing on window frame steel subdivision anchoring efforts, he gradually launched the "Shasteel" brand. Additionally, in 2001 Shen Wenrong invested 1.6 billion yuan (reported as 2.2 billion yuan) to acquire ThyssenKrupp's Husch Steel company from Europe; subsequently bringing its production line equipment to China under Shagang's umbrella.This strategic move allowed Shagang to break free from reliance on imported billets all at once while essentially completing construction of an integrated iron and steel upstream-downstream industry chain."
The second strategy is to adopt an eastward expansion policy through mergers and acquisitions in order to achieve significant development.
In 2005, the National Development and Reform Commission issued the "Iron and Steel Industry Development Policy" with the aim of enhancing the overall technical capabilities of the iron and steel industry, optimizing industrial structure, eliminating outdated production capacity, and controlling energy consumption and pollution. This policy encouraged the merger and reorganization of advantageous enterprises.
Shen Wenrong promptly implemented a strategic approach of "first near and then far, first easy and then difficult, first inside and then outside", embarking on a path of large-scale mergers and acquisitions.
In June 2006, Shagang Group incorporated Jiangsu Huai Steel Group, the largest steel enterprise in northern Jiangsu. Subsequently, it acquired Henan Anyang Yongxing Iron & Steel in September 2006. In January 2008, it purchased a 51% stake in Changzhou Xinrui Steel. The holding of Xixing Iron & Steel was completed in January 2010. Finally, by participating in the reorganization of Northeast Special Steel in 2017, Shagang Group became the actual controller of Fushun Special Steel New (600399.SH).
As at end-Q1 2024, Shagang Group's monetary funds amounted to RMB20.771 billion yuan; after accounting for restricted assets as well as cash equivalents balance reached RMB18.098 billion yuan. However,the group also had short-term borrowings amounting to RMB16.417 billion yuan along with non-current liabilities totaling RMB28.75 billion yuan maturing within one year during that same period."
From the supply side perspective, the steel industry will focus on energy saving, emission reduction, production reduction, and technology upgrading for an extended period of time in line with the "double carbon" goal.
On the demand side, there is evident structural weakness. The main areas of downstream demand for steel products are infrastructure, manufacturing, and real estate.
In order to establish a sustainable future for Shagang Group, it is imperative to be prepared for potential challenges. Under the leadership of Shen Wenrong, Shagang Group has continuously pursued mergers and acquisitions without pause in its efforts to build a lasting legacy.