Shanghai Baosteel Group Corporation

    Overview: A Company made of Steel

    Shanghai Baosteel Group Corporation is the biggest iron and steel company in China and ranks number two in the world. The company's origin can be traced back to 1978, when the Chinese government decided to build a large integrated steel production facility called Baoshan Iron and Steel. Baosteel is still a state-owned company and headquarter in the Baoshan district in Shanghai.

    Baosteel is the world's second biggest iron and stell company
    The company consists of six business segments: Resource development and logistics, steel processing, engineering and technology services, coal and chemicals, financial investments and production services. The main products Baosteel distributes are carbon steel, stainless steel and special steel.

    The company is listed on the Shanghai Stock Exchange and on the Fortune 500 list. In 2012, it had a registered output of 44.27 million tons of steel and owned more than twenty subsidiaries.

    Internationalization Strategy: Subsidiaries all around the World

    Baosteel is a global operating company with wholly owned subsidiaries all around the world. The most important ones are Baosteel America Inc., Baosteel Europe GmbH and Baosteel Singapore Pte. Ltd. These subsidiaries were all established in the 1990s and are responsible for the company's operations in its overseas markets.

    The first foreign market Baosteel entered was South Korea. Today, the company serves more than 40 countries around the world and is an important steel supplier for the global automobile, energy and transportation industry.

    In 2011, Baosteel exported 2.7 million tons of steel to foreign countries, which generated twelve percent of its total revenue. The most important market is East Asia with 38 percent followed by Europe and Africa with 23 percent and America with nearly eighteen percent. In comparison to 2010, the importance of the European, the African and the US markets is growing.

    In 2011, Baosteel generated twelve percent of its revenue in overseas markets
    Baosteel is not only interested in exporting its products to foreign markets, but also engages in acquisition and cooperation activities with foreign companies and mines. For example, Baosteel cooperates with the German company ThyssenKrupp AG on the development of new technologies. Furthermore, it acquired shares of both Brazilian companies and Austalian mines. The latest project Baosteel is persuing, is the acquisition of a 25 percent share of the Russian company Mechel Steel for USD 1.25 bn.

    R&D and Intellectual Property: Explosion of Patent and Utility Model Applications

    In the last years, Baosteel has accelerated its R&D efforts. The company increased its investments for technology innovation and established a national laboratory. Furthermore, it set up the Boasteel-Australia joint venture and has taken part in several national projects.

    In order to develop new innovations, Baosteel is focusing on R&D, engineering integration and continuous improvement. In addition to this, the company has established cooperations with eight universities and several scientific research institutes and companies, which are mainly operating in the automotive, home appliances and energy industries. As a result, Baosteel developed frontier technologies like strip casting, NANO technology, non-BF iron making, jet-spray forming and vacuum coating.

    For its innovations, Baosteel has been awarded several times, including the "2010 Top 100 Chinese Industrial Enterprises of Autonomous Innovation" and the "Demonstration Enterprises of National Technology Innovation" (2012).

    The following graphs represent the patent and utility model applications of Baosteel. The main difference between a patent and an utility model is the durability and the strength of protection. Patents are protected for twenty years, while utility models are only protected for ten years. Thus, an utility model can be described as a weaker form of patent.

    The chart below depicts the distribution of Baosteel's applications over time. The first patent and utility model applications were filed in 2003, with an output of nearly 25 applications. In the next seven years this number increased steadily to more than 650 in 2010. So far, this year marks a record high.

    The next chart illustrates the distribution of patent and utility model applications across different geographical areas. Baosteel filed the majority of its applications in its home market. Only a few applications were filed in Europe and in the worldwide patent office (WIPO). A fact that is surprising, considering Baosteel's position as one of the biggest steel and iron companies worldwide, with subsidiaries and customers all over the globe.

    The next two charts show Baosteel's applications distributed accross technology area. The three most important areas are materials/metallurgy, analysis/measurement and machine tools. These account for nearly 50 percent of all patent and utility model applications. Another interesting fact is the high percentage of "others". This could lead to the assumption that Baosteel does research on a brought variety of technology areas, since the sector "others" includes areas like thermal processes and chemical engineering.


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