Shen Wenrong

Jan. 31st, 2014

All things begin again and all things are new. On the occasion of the arrival of the New Year 2014, on behalf of the Board of Directors of Shagang Group and its Party Committee, as well as its administration, I have the honor to extend the New Year Greetings to all workers and staffs who have made great contributions to the Company’s development and constructions, as well as to the leaders at all government levels who have cared and supported Shagang’s construction and development, and people from all walks of social life! Wish you all work smoothly and good luck in everything in the New Year!

The Year 2013 which has just passed is a crucial year in which Shagang has implemented the "Twelfth Five-Year Plan". In the face of the severe challenges of the tight State macroeconomic control, the downturn in world economic growth, the declined international trade growth, the incremental factors of the Company’s cost increased and less favorable, and with the guideline of the Scientific Concept of Development, all Shagang workers and staffs will focus on enhancing "Effective and Efficient", insist on scientific leading, strengthen scientific management, pay close attention to cost decreasing and benefit increasing, carry out the indicators research, deepen energy reservation, initiatively fight the market, so that the Company has made new achievements in production and operation. In the whole year, we have fulfilled producing 31.70 million tons of iron, 35.08 million tons of steel and 33.85 million tons of rolled products, which have increased by 10.27%, 8.58% and 7.18% respectively on year-on-year basis; achieved RMB228.0 billion of sales revenue, RMB5.78 billion of tax and profit, which have increased by 4.6% and 16.5% respectively on year-on-year basis; we have exported 2.46 million tons of steel, and made US$1.5 billion foreign exchange earnings. In 2013, Shagang once again has awarded as one of the World’s Top 500, ranked at 318th, which was advanced by 28 rankings compared to last year, and is the only private steel enterprise in Mainland China who has entered into the World’s Top 500 for five consecutive years, as well as among the rankings of 10 large steel enterprises of the world’s most competitive steel enterprises.

2014 is the year full of hopes and challenges, also is a crucial year for Shagang to speed up its transformation and upgrading. All the workers and staffs of the Company should focus on the "Three Major Strategies" of the Company’s innovation, transformation and promotion. With the strategic orientation of "Doing the Steel Industry Finer and Stronger, Doing the Modern Logistics Stronger and More Excellent, Doing the Non-Steel Industry better and more sufficient", they should insist on the "Three Key Points" of highlighting Quality, Benefit and Efficiency, and earnestly do well in systematic cost reduction, operating management, quality improvement, non-steel development, logistics innovation, risk control, performance assessment, cultural construction, team construction, etc, in order to comprehensively improve the Company’s quality of economic operation, as well as further promote the core competitiveness of the Company.

The Management of the Company believes, under the guidance of the spirits of the 18th National Congress of the Communist Party of China (CPC) and the Third Plenary Session of the 18th CPC Central Committee, and with the correct leadership of Party committee of the higher level and the governments, the all Shagang workers and staffs who have possessed upholding plain living and hard struggle, and the courage to bring forth new ideas, will be able to firm the confidence and march forward courageously so as to struggle to climb towards the new goals and new heights. We shall further create and expand the Company’s competitive advantages. We shall make new and greater contributions in order to accelerate to realize Shagang planning target of development, to revitalize China’s national steel industry, and to achieve the "Chinese Dream" of the great rejuvenation of the Chinese Nation!