• March 18, 2022

 The untold story of Du Shuanghua and the Rizhao Steel Sale in 2010

Founded in 2003, Rizhao Steel Co. developed as a producer of steel slabs. Later, it built itself into the second-largest steel company in Shandong province. By the end of 2005, Rizhao began its new phase, focusing more heavily on asset optimization, efficient use of capital, and cost savings. The effort would require many resources, including capital and human resource, but eventually succeeded. By the end of 2006, Rizhao had reduced its total cost of production by 16.7% while increasing its net profits by 69.2%.

The Changes in the Steel Industry That Were Resulted from the Sale

When the deal was completed on December 28th, 2010, the Rizhao Steel Co., Ltd. share price jumped by an incredible 66%. Before the sale, the company was in the red. In the first nine months of 2010, the company incurred losses of 20.14 billion Yuan (approximately USD 2.4 billion) on sales of 49.36 billion Yuan (roughly USD 7.6 billion).

Even before Du became the CEO, Rizhao Steel’s debt was already increasing rapidly, and the company was only able to meet its obligations with debts from the previous owners. After Du became the CEO of Rizhao Steel in September of 2010, the company began to explore ways to strengthen the company and avoid losses.

READ: An Introduction to Du Shuanghua Chairman of Rizhao Steel

The Transition to New Ownership

In his words, Du states that he is the father of Rizhao Steel, he created it, and he will see it through its development. He feels that this is his duty to the country of China. He was involved with Rizhao Steel; Du invested hundreds of millions of RMB into its development. He believed in the company because he knew it could be successful if the right decisions were made.

A major reason the Rizhao Steel business was able to become so successful is Du’s knowledge and the support of his staff. Du believes in his people. His investment and support were also reflected in the relationships between employees and management. In this way, Rizhao Steel was able to grow and prosper in the most competitive market in the world.