Sinosteel General Manager Ou Chao-hua is not only a torchbearer of the Sinosteel spirit but also an executor of the company’s strategy to actively promote “value innovation and blue ocean creation.” Ou stated that the steel industry is by no means a “sunset industry,” but rather a supply chain for advanced industrial materials. As long as the company can master business strategies such as “technological innovation, quality improvement, cost reduction, and competitiveness enhancement,” product value will inevitably continue to rise, and a sustainable blue ocean market can be created.
Sinosteel Chairman Zou Ruoqi recently proposed a new business policy of “value innovation and blue ocean creation” for the company’s long-term development.
Tall and slim, with a gentle and amiable personality, Ou Chao-hua is passionate about mountaineering. He said that after joining Sinosteel in 1972 (the 61st year of the Republic of China), he developed a love for mountain climbing from 1975 (the 65th year) onwards. He often went hiking with colleagues who shared the same interest, exploring outdoor mountains. In Taiwan, there are over 100 peaks above 3,000 meters known as the “Taiwan Hundred Peaks,” including Yushan, which he has climbed more than 100 times, along with about 20 other well-known major mountains. He has climbed Yushan, which stands 3,592 meters high, five times and has deeply grasped the essentials and joys of mountaineering.
Managing is Like Mountain Climbing—One Step at a Time
Ou believes that although the process of mountain climbing is tough, the feeling of total relaxation and high spirits afterward greatly benefits his work, making him less prone to fatigue. This is a key reason why he maintains such high energy levels. Even when work is exhausting, he uses his lunch break to take walks around the factory area to keep his stamina at 100%.
When asked if mountain climbing helps him in managing the company, Ou humbly said that he climbs purely for physical fitness. Of course, the principles of mountain climbing are no different from those of running a business—you must be very down-to-earth, taking one step at a time, neither too slowly nor too hastily. Going too slowly will cause you to fall behind and be overtaken by competitors, while “haste makes waste,” and going too fast may lead to failure. He believes the spirit of mountain climbing aligns not only with the “Sinosteel spirit” but also with the spirit of “value innovation.”
Regarding the approach to “value innovation,” Ou pointed out that to innovate product value, Sinosteel has updated production equipment and control systems, and when necessary, invests in adding new equipment.
For example, Sinosteel will invest over NT$14 billion to add a third electromagnetic steel sheet production line, which is expected to be completed and operational by 2014. By then, the annual production capacity of high-grade electromagnetic steel sheets is expected to increase by 150,000 metric tons, rising from the current 700,000 metric tons to around 850,000 metric tons.
Expanding Capacity to Meet the Next Generation
Ou said that Sinosteel’s third electromagnetic steel sheet production line is designed to meet the future demand for higher energy efficiency in home appliances such as refrigerators and air conditioners. The goal is to produce higher-grade and more energy-saving electromagnetic steel sheets for downstream manufacturers of motors, compressors, and transformers, aiming to reduce iron loss and magnetic loss to achieve energy conservation and carbon reduction goals.
In addition to the third electromagnetic steel sheet production line, Sinosteel’s newly completed third cold rolling production line follows the same principle. It has a planned annual output of 1.5 million metric tons, including 1.1 million metric tons of cold-rolled products and 400,000 metric tons of hot-dip galvanized steel coil products, mainly used in automobiles and home appliances, contributing significantly to energy conservation and carbon reduction.
Regarding its layout in mainland China, Ou recently led a delegation to visit Sinosteel’s affiliated businesses there, including Sinosteel Construction in Kunshan Industrial Park, Sinosteel Precision Materials in Changzhou, and Huayang Aluminum in Ningbo. He said that steel is a green industry, as many steel products are made from recycled scrap iron, reducing energy consumption.
He believes that under the mainland’s 12th Five-Year Plan, which includes many super-high-rise building projects with significant business opportunities, there are great development prospects for Sinosteel Construction. If needed, Sinosteel will provide full support.
As for the market prospects of Changzhou Sinosteel Precision Materials, Ou said that the company mainly produces titanium alloy sheet and wire rod materials, which, due to their high strength and corrosion resistance, have a promising future market. This includes participation in supplying materials for seven emerging industries in the mainland’s “12th Five-Year Plan,” such as new energy, energy conservation, environmental protection, and biomedicine, as well as seawater desalination projects, to seize business opportunities.
Steel Products Are Recyclable—Not a Sunset Industry
Ou believes that the steel industry is by no means a “sunset industry.” As long as there is active research and development and innovation, even ordinary materials can become valuable, and “red ocean products” can turn into “blue ocean products.” For example, an ordinary table may be cheap, but if innovated to produce a table with high added value, its price will also increase, along with its competitiveness. Another example is Wang Steak, which has many branches nationwide and continuously improving performance—a good example of “value innovation.”
Additionally, Sinosteel works closely with and forms strategic alliances with the downstream screw and nut industry, aiming for product value innovation to drive the transformation of Taiwan’s steel industry and enhance the international competitiveness of “MIT” (Made in Taiwan) products.
Therefore, Ou emphasized that as long as the company can timely grasp business strategies such as “product technological innovation, quality improvement, production cost reduction, and market competitiveness enhancement,” it can surely “seize the initiative and remain invincible” in the market.
As for Huayang Aluminum, a subsidiary of Chinalco, Ou said that the company currently has an annual production capacity of nearly 50,000 metric tons, mainly supplying raw materials for downstream food cans, lids, and tabs. It is also planning to expand its plant. He believes that as long as the company can secure a stable supply of raw materials, obtain lower raw material costs, and improve product quality, it can tap into the vast market opportunities in mainland China.
Ou Chao-hua, who once served as Sinosteel’s Vice President of Production, was reassigned in January 2007 (the 96th year of the Republic of China) by senior management to leverage his expertise and experience in production. He was appointed Chairman of Zhonglong Steel, tasked with assisting in the push for the second phase, first stage blast furnace expansion project. The expansion was completed on February 26, 2010 (the 99th year), and the ignition ceremony was successfully held. Immediately afterward, the second stage expansion was initiated, but it was hindered by central Taiwan’s total air quality control regulations, which prohibited further increases in nitrogen oxide emissions. This required a new environmental impact assessment for the second-stage expansion, which became a major challenge during his time at Zhonglong.
But Ou remained undiscouraged. He said the crux of the EIA issue was the need to effectively reduce nitrogen oxides and sulfur oxides. At the time, Sinosteel hoped to assist nearby Taipower thermal power plants in updating their equipment in exchange for more lenient construction conditions regarding nitrogen oxide reductions. However, after six months of negotiations, Taipower did not agree, and the EIA approval was delayed.
Later, with the full assistance of Sinosteel’s technical department, additional environmental protection equipment was installed, and the parent company, Sinosteel, also provided timely carbon reduction benefits to support the construction. Eventually, the Environmental Protection Administration conditionally approved the EIA, allowing the Zhonglong second-stage expansion project to move forward smoothly, which brought him relief.
Returning to Sinosteel to Drive Value Innovation Again
Ou said that he originally planned to stay at Zhonglong for five years before retiring. However, unexpectedly, in June last year, upon the recommendation of Chairman Zou Ruoqi, he returned to Sinosteel to serve as General Manager, taking his career to the next level and assisting Chairman Zou in promoting the “value innovation and blue ocean creation” market.