Hai Electric's transformation and development path

Shanghai State-owned Assets: What is the current industry competition situation facing Shanghai Electric?

Huang Dinan: During the “Eleventh Five-Year Plan” period, Shanghai Electric achieved rapid development. From 2004 to 2007, our sales increased by 10 billion yuan annually. This was mainly due to the rapid growth of the power station group, and the extraordinary growth of the power station was mainly due to blowouts in the Chinese thermal power market. The highest output of the power station group reached 36 million kilowatts, which is equivalent to the total output of major international power station equipment suppliers such as Siemens and GE, making Shanghai Electric the world's largest thermal power equipment supplier. The market share of its million kilowatts of ultra-supercritical units in the domestic market has reached over 50%, and overseas market expansion has also led domestic counterparts.

During the “Eleventh Five-Year Plan” period, by stepping up reforms and adjustments, our historical problems have basically been solved, the burden has been reduced, the bleeding points have been greatly reduced, the overall asset quality has been continuously improved, and the company’s health has risen to a new level. This laid a solid foundation for us to enter the fast lane of development.

At the same time, we actively promoted the adjustment of the industrial structure, identified four major industrial sectors and built a port-related base. In particular, after 2007, it seized the opportunities for new energy development, rapidly increased the development of nuclear power and wind power, and achieved remarkable results.

However, from 2008 to 2009, the situation of the state-owned power market has been rapidly changed, and the growth rate of the power plant industry has suddenly dropped. Of course, this also has the impact of the financial crisis. However, what is more important is that China's energy structure will undergo major changes in the future. It is expected that the annual average installed capacity will fall back to about 65 million kilowatts within five years, and the proportion of installed thermal power will be further reduced. In other words, it is almost impossible to replicate the development road of the "Eleventh Five-Year Plan".

On the other hand, the rapid development of domestic counterparts has also brought us great challenges. If the speed of development does not come, it is likely to be dropped in the next round of development. If we say that the key point of the previous round of competition is thermal power, the thermal power will win and the whole game will win. The key to the next round of competition is new energy. In a sense, how new energy development determines Shanghai Electric's future industry status. We arrived when we should exert our power.

It can be said that 2004-2007 is the rapid growth period of Shanghai Electric, and 2008-2009 is the steady growth period of Shanghai Electric. From then on, it was the transformation and development period of Shanghai Electric. Adjusting the structure, changing the mode, and promoting development has become a major issue facing Shanghai Electric.

"Shanghai State-owned Assets": How does Shanghai Electric adjust its structure and change its mode?

Huang Dinan: As mentioned before, during the “Eleventh Five-Year Plan” period, the historical issues left by Shanghai Electric have basically bottomed out, but the improvement of the structure needs further efforts; major industries have achieved great results, but further development is still very confusing; some industries For example, energy conservation, environmental protection, and automation are theoretically promising, but there is still a long way to go before real breakthroughs are made to form industrialization.

It can be said that Shanghai Electric's reform has entered a critical stage, the industry has entered a promotion stage, development has entered an exploration stage, and management has entered a stage of innovation. In this situation, we regard the transformation and upgrading as a top priority.

To this end, we have studied and formulated a tangible overall thinking that is to insist on four dependencies: relying on technological progress to enhance the Group’s core competitiveness; relying on business model innovation to achieve sustainable development; relying on reform and management to increase economic efficiency; relying on human resources, Realize the goal of "starting your own business again."

Rely on technological progress

Shanghai State Assets: It seems that it is the only way for all transformation enterprises to rely on technological progress.

Huang Dinan: Our main business is manufacturing. The fundamental point of the transformation and development of manufacturing is technological progress and industrial upgrading. From the historical point of view of Shanghai Electric, technological progress determines the status of the company. Now that Shanghai Electric's technological progress framework has been established, the next step is to form a new commanding height.

In this regard, we have achieved two changes:

First, from the previous introduction of technology-based, gradually turned to independent innovation. Take power generation equipment as an example. From the introduction of technology to industrial breakthroughs, 30-60,000 kilowatts of subcritical units have been used for about 15 years; 60-100 million kilowatts of supercritical and ultra-supercritical units have been used for about 7 years.

In the past few years, on the basis of digesting foreign advanced technologies, we have vigorously promoted secondary innovation and independent innovation, implemented a large number of new and high-tech industrialization projects such as the development of key equipment for large-capacity supercritical thermal power units, and enhanced our capability for independent innovation. Shanghai Electric provided the Shanghai Waigaoqiao No. 3 Power Plant of the main equipment with two 1 million-kilowatt ultra-supercritical units. The technical indicators such as coal consumption have set a new world record: the average national coal consumption for power supply is 339 g/kWh; the average level in developed countries in the world is 330. The coal consumption of the most advanced million-kilowatt ultra-supercritical unit is about 300 g/kWh, while the actual coal consumption of the 1 million-kilowatt ultra-supercritical unit of Waigaoqiao No. 3 power plant reaches 282 g/kWh. Time. The 1200 MW ultra-supercritical unit with the largest international capacity has been developed. The main steam pressure is 28 MPa, and the temperature is 600°C. The thermal efficiency of the unit is about 3% higher than that of the current capacity unit.

Mitsubishi Elevator is also worth mentioning. The company has always adhered to the principle of "technological introduction and independent development." While dynamically introducing technology, it also insists on independent development. At present, autonomous technology products account for 70%. Since its establishment in 1987, Mitsubishi Elevator has produced and sold more than 320,000 elevators, achieving a total sales revenue of 93.3 billion yuan. In 2010, the main business income of Mitsubishi Elevator exceeded 10 billion for the first time, reaching 10.06 billion yuan, which was 143.3 times that of 1987. Its main economic indicators have been ranked in the forefront of the domestic industry for 19 consecutive years, and it has maintained the number one in the world for the seventh consecutive year.

The second is the shift from high-carbon products to low-carbon products. In the first three years of the “Eleventh Five-Year Plan”, we focused on the field of high-efficiency and clean energy and raised the issue of “Three Big Battles” in the area of ​​technological breakthroughs: that is, millions of kilowatts of thermal power, millions of kilowatts of nuclear power and gas turbines, and all have achieved success.

Here focus on thermal processing technology. In general, thermal processing technology consumes more energy and is 15 times worse than cold processing technology. However, large-scale castings and forgings are the key bottleneck restricting the development of China's nuclear power and other major equipment. Qinshan Nuclear Power Station Phase III imported forged parts from Japan. When the products are ready for shipment to China after production, Japan has not granted export permits for various reasons, causing the equipment to be put on the dock for two years. This prompted the country to decide that large forgings must be made locally. In 2007, Shanghai Electric established a heavy industry group to increase the development of nuclear power industry. In 2009, the thermal processing technology reconstruction project was completed, and 16,500 tons of free-forging hydraulic presses, forging manipulators, and electroslag remelting furnaces created the first of three worlds at the time. At present, Shanghai Electric's nuclear island equipment has reached a domestic market share of about 50%, conventional islands are about 30%, and its internal components and control rod drive mechanism are kept at 97%.

Rely on reform and management

Shanghai State-owned Assets: Shanghai Electric has designated 2012 as the “Management Year”, which may be related to transformation and upgrading?

Huang Dinan: Yes. During the “Eleventh Five-Year Plan” period, the focus of Shanghai Electric's reform is to solve the problems left over from history, reducing corporate legal persons from more than 1,000 households to the current 200 households. The number of registered employees was also reduced from 118,000 at the end of 2006 to 80,000 in 2011.

Reform is a long-term task, not shutting down factories. During the "Eleventh Five-Year Plan" period, we have not only solved the problems left over by history but also made a lot of investment, mostly in terms of hardware. As mentioned earlier, the Lingang base's investment in nuclear power and wind power, as well as the technological transformation projects of the Minhang base's thermal processing technology, all make our plant and equipment at the advanced level in the world.

In the next step, our focus for reform is to establish a sustainable development mechanism. That is, focusing on the construction of "soft power" and improving the technical level and product technology by strengthening management. Pay close attention to management, to be done as a strategic task.

We propose to establish one company (one company) concept, give play to the advantages of the group, and promote collaborative management. At present, Shanghai Electric's management presents two new changes:

The first is from decentralization to concentration.

Capital management. It is required that the funds of the group-owned enterprises be concentrated in the financial companies and the financial companies should conduct unified operations to play a greater role. In recent years, the financial company's deposit concentration has been maintained at more than 80%, and has achieved relatively good economic benefits.

Purchasing centralized management. The procurement of online materials and bids for major raw materials such as iron and steel, IT hardware and software, etc. of their affiliates are required to implement unified network centralized procurement. In 2011, the total amount of Shanghai Electric's online centralized purchases exceeded 30 billion yuan, and only the centralized procurement of steel products reduced the cost by 300 million yuan. Through centralized management, the Group has taken advantage of its overall strength.

Real estate, property central management. We are operated and managed by the asset management companies on the properties scattered below. Through the unified management of the properties, the rental income will increase from 420 million yuan in 2007 to 600 million yuan in 2011.

As we all know, Shanghai Electric is a long-established company with a large number of companies. Instead of treating the group as a collection of companies, we have actively played the role of a group headquarters and raised the degree of concentration as an important starting point for improving the capabilities of the headquarters and the functions of the headquarters. Whether it is the formation of the “2+1+x” industrial layout or the promotion of online centralized procurement; whether it is the increase in the degree of capital concentration or the centralized operation of real estate and property, it all reflects our new management philosophy.