The Baoxin Guangxi Hongwang project is the world’s first case of domestically produced PLC controlling a high-speed acid rolling mill. Prior to this, the Hongwang Hunan base had already conducted preliminary explorations, with its silicon steel base deploying the Baoxin PLC system, covering 15 production lines and over 100 control units. The order for Guangxi Hongwang was signed later, with a total price of 700 million yuan (EPC general contracting service, including PLC system integration).
Due to the EPC general contracting model, the scale is still quite large. If all projects are of this scale, revenue will be easier to achieve.
Guangxi Hongwang is a joint venture established by Hongwang Holdings Group and Guangxi Shenglong Metallurgy, founded in January 2024. This project fills the gap in high-end silicon steel in Guangxi and the southwestern region, and is considered a strategic project locally, receiving significant attention.The products mainly serve the fields of new energy vehicles, industrial motors, and home appliances, with a reach into the Southeast Asian market. The total investment exceeds 3 billion yuan, covering an area of 500 acres, with construction divided into two phases, and a total planned production capacity of 2 million tons, with an annual output value target of 10 billion yuan.
The enterprise is built according to the “lighthouse factory” standard, with an intelligent automation rate exceeding 90%, achieving full-process traceability. It adopts a fully continuous six-stand rolling mill, reducing energy consumption by 30% compared to traditional processes and increasing efficiency by 40%.
Phase One Project (2024-2025), with a capacity of 1.5 million tons/year (high-efficiency non-oriented silicon steel + high-end galvanized sheet). The investment amount is approximately 2.2 billion yuan. The output value target exceeds 7 billion yuan/year. The Phase Two project is still in planning, with a capacity of 500,000 tons/year, expected to continue along the silicon steel and galvanized sheet route, with specific capacity distribution to be disclosed by the authorities..
The first phase is scheduled to start in September 2024, and on June 26, 2025, the 1550 acid washing rolling mill combined unit successfully rolled the first high-quality steel coil, marking the entry into the substantial production phase. The acid washing rolling mill combined unit uses Baoxin’s domestically produced large PLC control system, designed for a speed of 1580m/min, with an annual production capacity of 1.5 million tons, achieving high-speed and high-precision production.
In the future, the second phase is likely to also adopt Baoxin’s solution.
The steel industry has always been under strict control of production capacity, and future new production capacity will mainly focus on four areas: green low-carbon, high-end special steel, short-process steelmaking, and digital transformation, as new capacity is strictly prohibited, requiring high-quality development through capacity replacement and structural optimization. This has resulted in a high-low cut, with an increase in high-end demand and a complete decline in low-end demand.
Domestic related enterprises have already begun to break through large PLCs, so the speed of domestic substitution will accelerate in the future, including Ansteel and others having their own large PLCs, and Zhongkong Technology is also fully entering the large PLC market. Many may think Zhongkong is also strong in the steel field, but this may be a misunderstanding, as each field has its own expertise, and Baoxin has very strong capabilities across the entire steel process.
From preliminary communications, there are concerns that declining steel profits will compress capital expenditures, leading to reduced demand. Looking at the larger cycle, this is indeed the case. Setting aside Baoxin’s expansion into non-steel fields, the demand issue in the steel industry itself is also worth studying.
《How Long is the Adjustment Cycle for Baoxin Software?》
Overall, capital expenditures are under pressure due to profitability, but structural growth is also very clear. In addition to the growth in demand for green low-carbon, high-end special steel, short-process steelmaking, and digital transformation, another aspect is the renovation of the core three-electric systems in the steel industry.
The renovation of existing stock is highly related to lifespan and technological iteration.
The three-electric systems include electrical systems (transformers, high-voltage motors, etc.), automation control systems (PLC/DCS), and computer information systems (MES/monitoring systems), etc.
The traditional lifespan of electrical systems is about 15-20 years, but efficient energy-saving devices (such as S11 type oil-immersed transformers, variable frequency motors) are accelerated for replacement due to policy requirements, shortening the cycle to 10-15 years; large PLC/DCS lifecycles are 10-20 years, with imported equipment from the 1990s running for nearly 30 years, entering a concentrated replacement period; small and medium-sized PLCs have a faster technological iteration (such as AI integration), with an update cycle shortened to 8-12 years. Computer information systems (MES/monitoring systems), driven by the industrial internet and AI, have a software update cycle of about 5-8 years, while hardware (servers, sensors) has a cycle shortened to 6-10 years due to increased computing power demands.
Last year, the need for equipment updates in the industrial sector was emphasized, particularly in the steel industry, indicating that the renovation of existing stock is entering an accelerated phase. The Ministry of Industry and Information Technology’s “Equipment Update Guidelines” requires mandatory updates for outdated devices over 20 years old in industries such as petrochemicals and steel, with the steel industry’s three-electric systems being the first to be addressed. Under the dual carbon goals, the service life of high-energy-consuming equipment (such as traditional electric furnaces) has been reduced from 10 years to 7-8 years, promoting the widespread adoption of efficient electric furnaces (such as all-fiber energy-saving electric furnaces).
Domestic enterprises have broken through supply capabilities and possess replacement capabilities. Large PLCs have long been monopolized by Siemens and Emerson, but the domestic substitution rate continues to rise, with stock replacement and domestic substitution forming a dual driving force. Policy support for domestic equipment procurement leads steel enterprises to prefer domestic three-electric systems that are 30-40% lower in cost.
Baoxin has also disclosed relevant cases in the renovation of old lines.
Baoxin Software successfully completed the integration work for the three-electric renovation project of a cold-rolled high-speed leveling machine group for a domestic steel enterprise. The production line quickly achieved daily production after commissioning and has maintained stable operation since. This achievement fully verifies the excellent performance of Baoxin Software’s independently developed Tianxing PLC in harsh industrial environments, marking a significant step forward in breaking foreign technology monopolies, promoting domestic substitution, and achieving the “rebirth” of outdated production lines in the steel industry.
From the project description, it should not belong to Baowu’s project, as internal projects at Baowu are generally marked, which aligns more with the common practices of enterprises outside Baowu. The renovation of cold-rolled production lines that have been in service for over 15 years addresses issues of declining control precision and high failure rates. This indicates that Baoxin has entered a stage of large-scale replication in the renovation of outdated lines.
Overall, Baoxin’s actual incremental business is quite substantial, which determines that Baoxin’s business structure has a gradual transition process. As mentioned earlier, the three-electric systems are the core systems of the steel industry, and Baoxin’s business structure is basically centered around the transition from non-core to core systems. In addition to looking at the three-electric systems, the text also mentions the increase in the proportion of efficient electric furnaces, which also presents many incremental demands.
Efficient electric furnaces achieve improvements in energy efficiency, environmental protection, and production efficiency through five major structural innovations: vertical furnace preheating (scrap preheating), flat melting pool smelting (continuous feeding), clustered oxygen guns (deep decarbonization), graded waste gas treatment (DXN cracking), and AI control. Incremental demands mainly include several aspects: control system upgrades/ intelligent production management/ data platform integration/ equipment intelligence/ full-process services. Corresponding products and services (taking Baoxin as an example) include large PLCs (T4 series), APS scheduling models + MES quality control, xIn³Plat industrial internet platform, inspection robots + remote operation and maintenance systems, EPC general contracting + process knowledge base.
Therefore, we have always defined large PLCs, robots, etc., as growth businesses, which differ significantly from downstream cycles. Currently, it is essential to observe the ability of growth businesses to hedge against industrial cycle pressures; the stronger the ability, the better the performance resilience.
PS: For more research content on industrial control enterprises, please visit the Wuyou Tree Industrial Control Group.
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