Baosteel and China Shipbuilding Industry Package Logistics Sign Scrap Supply Agreement

Recently, Baosteel Co.,Ltd. and China Shipbuilding Industry Package Logistics Co., Ltd. sign scrap supply long-term agreement, creating precedent for Baosteel and waste production companies' establishment of scrap direct supply mode. This will play an important role in promotion and demonstration as to Baosteel's further regulation of scrap purchase and supply management and guarantee of scrap quality cost control.

There has been scattered resources and unsound specification standards in domestic scrap industry. Scrap steel companies are mostly scrap recycling and processing small workshops, with uneven management level. Therefore, Baosteel is faced with many challenges in scrap supplier team management and scrap quality and cost control. Over the years, Baosteel has been committed to scrap standards establishment and scrap purchase and supply model improvement. China Shipbuilding Industry Full Package Logistics Co., Ltd. is a wholly-owned subsidiary set up by China Shipbuilding Group last August. Its scrap business includes concentrated sales and disposal of waste materials generated by China Shipbuilding Group shipyard in shipbuilding process. Recently it has established two scrap processing bases in Shanghai. Its establishment creates conditions for Baosteel's exploration of establishing scrap direct supply model with waste production and application companies. After the founding of the company, Baosteel Co.,Ltd. Raw Material Procurement Center actively contacts them and discusses cooperation matter with them.

Currently, the two sides have reached long term cooperation intention and signed cooperation agreement on procurement and supply of scrap varieties. Around cooperation, the two sides will strive for synergies. For scrap sorting, processing, logistics and transportation links, Baosteel sends experts for on-site guidance to ensure scrap quality control. As the same time it specifically establishes advanced reporting system and saves logistics time. Around Baosteel needs, China Shipbuilding Industry Full Package Logistics Co., Ltd. establishes special mechanism and provides security for all aspects.

The establishment of scrap direct supply mode has great benefit for Baosteel's improvement of scrap quality, logistics and transport efficiency, reduction of purchase and supply management cost, regulation of cooperation and reduction of honest risk. In addition, scrap direct supply also has a positive significance for further promoting resource recycling.