The 18th National Congress of the Communist Party of China has not only drawn a blueprint for the great rejuvenation of Chinese Nation, but also pointed out the direction for further development of Baosteel at its alternating period of planning. The year 2012 marks the conclusion of Baosteel’s Three-Year Plan 2010-2012. Looking back on our journey over the past three years, the economic climates both at home and abroad have been extremely capricious and complicated while the iron and steel industry has been challenged by unprecedented difficulties. We, the Baosteel people, rising to such challenges with our dedication and unity, managed to make breakthroughs by virtue of innovation and transformation and sustained the strong market competitiveness. Over the three years, Baosteel endeavored strenuously towards greater excellence and delivered on our solemn commitment – the ultimate value of an enterprise lies in its contributions to the social well-being.

The Baosteel people have unyieldingly strived towards this goal. In the past three years, Baosteel’s primary operation in iron and steel effectively addressed the severe market challenges and stayed ahead in the domestic industry by focusing on the areas such as improvement of industrial layout, adjustment of product mix, optimization of cost performance, technological innovation and overall competitiveness. In collaboration with the main steel sector, the diversified sectors of Baosteel have gradually undergone the transformation from “internal” units to “market-oriented” sectors, and made solid progress in their industrial development. The Company has initiated its strategic transformation “from steel to materials”, “from manufacturing to services” and “from China to the world”, launched the research and development of new materials such as aluminum, magnesium, titanium and energy storage materials, kept optimizing deployment of the processing and distribution service network, and begun to gradually grow into a supplier of comprehensive material solutions specializing in iron and steel. We have not only explored the service models and practices in areas such as e-commerce, energy conservation and environmental protection, information technology and finance, but also made breakthroughs in the construction of overseas iron and steel supply chain as well as investments in diversified industry operations in overseas undertakings. We have also achieved breakthroughs in the development of technological innovation system and escalated our R&D inputs and efforts, producing fruitful R&D achievements and thus providing strong support for the Company’s efforts to sustain its powerful competitive edges. The past three years saw the company’s sustained profitability and witnessed an accumulated profit of RMB 53.6 billion in total, ranking the second in the global iron and steel industry for three straight years. Baosteel, moving up in the Fortune Global 500 ranking year by year and securing the 197th position in 2012, has also been rated as the “World’s Most Admired Company” and awarded the highest credit ranking among iron and steel enterprises around the world by the top three credit rating agencies, namely Standard & Poor's, Moody’s and Fitch. In addition, Baosteel has also won China Charity Award, the top government award in Chinese philanthropy, for four consecutive years.

Looking into the future, the Baosteel people see not even the slightest room for easing our efforts as we still have a long journey ahead and important tasks on our shoulder. We are in face of extremely harsh internal and external environments as well as evadable difficulties and challenges, such as the struggling global economic recovery, weak momentum in China’s domestic economic growth, prominent structural conflicts, intensifying homogenized competition in China’s iron and steel sector, tremendous environmental pressure and operation on slim-profit margin. As for Baosteel, we have already commenced our strategic transformation but not yet making as much as solid progress as we should have. As far as I see, to move from “Good to Great” requires greater advancements in the following three areas. Firstly, we need to acquire and possess a series of world-leading technologies and become a front runner in iron and steel technologies. We shall, on such basis, satisfy and guide users’ demands for future materials. Secondly, we need to continue implementing our environmental-friendly management strategy and become a driver of the green industry chain. We shall forge the iron and steel operations into an energy-conserving and environmental-friendly green business that provides support for the rapid development of national economy and the upgrading of consumption demand of the general public, and then guide the industry on to a path of sustainability. Thirdly, we shall become a role model for joint development of both employees and enterprise, strive to win the recognition of our shareholders, employees and communities and become a strategic supplier and an indispensable value chain partner of our customers. Baosteel will hold on to the strategy of “premium products + scale production”, realize innovation-driven transformation and development by environment management and actively develop future-oriented core competence so as to better fulfill our responsibilities with greater capabilities. I firmly believe that Baosteel will grow into a great company.

The pursuit of excellence and dedication to social well-being are always our never-changing aspirations from the very beginning, our truest belief and most overwhelming emotion. With our hearts deeply rooted in such aspirations, our faith firmly anchored in such propositions, our sentiments fostered around such emotions and our actions upon such a belief, nothing could stand in the growth path of a thriving and prospering Baosteel.