It is reported that in face of the industrial slowdown at present, Baoshan Iron & Steel Co Ltd plans to cut down the management fee by 30% this year which may involve the interior structure adjustment.
As per report, the ministry of supervision in Baosteel has early finished their second-stage special observations in late March mainly involving the business reception expense, meeting affair charges, sales administration fees, advertising expenses, consulting fees and public service fees etc. This observation is aiming to prohibit the extravagance and waste behaviors to ensure the goal of 30% reduction of management fees.
Mr Ma Tao a steel industry analyst with Bohai Securities holds the views on the internal observation that the cost reduction is the inevitable choice for the steel mill to get the rid of economic slowdown. He adds that, to lower the purchasing prices of iron ore is as the same as manufacturing technique improvement, but the steel mills always lean to take the policy of management fees reduction.
Actually, Baosteel has once carried out an internal survey when the financial crisis arriving. Mr Xu Lejiang board chairman of Baosteel points that many management problems came out, although China steel industry realized 15% high speed growth for 7 years in a row.
One of the major policies is to merge nearly 20 departments in the company, but there is no related information revealed in its specific plans. The analysts finger out that despite the structure adjustments, another point of the of management fees reduction is to realize the adjustments of personnel matters, including staff cuts and salary reduction.
Baosteel has released the salaries of the high officials in its annual report. The total number of the salaries for 26 high grade managers is at CNY 14,991,900. The top three officials' salaries in Baosteel are posted at CNY 2,739,200 down by 30.6%YoY and the average salaries at CNY 576, 600 down by 25.6% from the previous year.
(Sourced from.Mysteel.net)
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