The TRON Lightcycle Power Run stands in the Tomorrowland section of Shanghai Disneyland (DENG YAQING)

In a huge dome immersed in blue laser lights, people experience a breathtaking race along glowing glass rails, accompanied by adrenaline-pumping music with 3D graphics flashing past their eyes. It's not an imaginary sci-fi scene, but a real-life scenario that tourists can enjoy, on top of the world, in the TRON Lightcycle Power Run, the roller coaster in the Tomorrowland section of Shanghai Disneyland.

It was constructed by Metallurgical Corp. of China (MCC). The state-owned enterprise, which originally specialized in the planning, exploration, design and building of production facilities for China's major steelmakers, has turned huge losses into gains over the past three years.

Affected by global economic slowdown, iron and steel overcapacity and unsuccessful mergers and acquisitions, MCC suffered losses amounting to 7.36 billion yuan ($1.07 billion) in 2012, with interest-bearing liabilities surpassing 170 billion yuan ($24.72 billion). However, by 2015, the company had realized annual profits of 6.86 billion yuan ($997.5 million), with average annual growth reaching 24.8 percent from 2012 to 2015.

"Behind the significant turnaround are efforts to focus on construction of metallurgical facilities, a tremendous input in scientific and technological research and development, and a shift to emerging industries," said Li Jin, an expert on state-owned assets. Li noted that it was rare for a state-owned giant to reverse its trajectory within three years.

Main business

The state-owned enterprise as well as the entire iron and steel industry plunged into profound restructuring in 2012, which initially triggered a serious internal confidence crisis. Despite that, MCC executives decided to focus resources on developing its metallurgical business, considering the firm's familiarity and expertise within the industry.

"On this front, MCC has accumulated 19 core technologies—the most advanced in the global market—encompassing all the procedures of iron and steel metallurgy," Lin Jinzhen, MCC Party Committee Secretary, told Beijing Review.

In July, the construction of Baosteel's Zhanjiang iron and steel manufacturing plant was completed in south China's Guangdong Province, with the entire operation carried out by 14 subsidiaries of MCC. Targeted at the high-end market, the Zhanjiang facility doesn't produce crude steel. Instead, it specializes in manufacturing high-quality, low-carbon steel plates.

Opposite the Zhanjiang plant, across the sea in Viet Nam's Vung Ang Economic Zone, is the MCC-built Formosa Ha Tinh steel plant, the largest modern iron and steel mill in the country and a template for steel mill construction and operation in Southeast Asia. In Malaysia, a 3.5-million-ton iron and steel project is being built by MCC in the Malaysia-China Kuantan Industrial Park.

Additionally, the company set about spinning off its non-core business and tackling poor-performing subsidiaries to improve efficiency and the security of the capital chain. In 2012, MCC handed over MCC Hengtong to the China Travel Service Group Corp.; in 2013, MCC Paper Industry Group was merged with China Chengtong Holdings Group; MCC Huludao Nonferrous Metals Group came into bankruptcy proceedings; in 2014, stocks of Zinc Industry Co. Ltd., a former subsidiary of MCC Huludao Nonferrous Metals Group, resumed trading on Shenzhen Stock Exchange after the company completed mixed ownership reform.

The reversal of its performance couldn't be realized without scientific and technological innovation. From 2013 to 2015, MCC invested 4.69 billion yuan ($681.9 million), 4.79 billion yuan ($696.5 million) and 5.18 billion yuan ($753.2 million) in research and development, respectively. Hitherto, the company has 17 national-level science and technology innovation platforms and key laboratories, more than 18,000 patents in force and about 17,000 engineering technicians, which supports MCC's endeavors into emerging industries.

New exploration

In the first half of 2016, aside from its three existing technological research institutes, MCC established another three institutes for studies on theme park construction, healthcare industry, and water environment.

"In order to reinvent its competitive advantages, MCC has set foot in emerging industries. In the future, the company needs to solidify its construction standards and models, and formulate a development framework for the six technological research institutes to fuel emerging industry growth," said MCC Chairman Guo Wenqing.

In 2015, MCC's non-metallurgical industries made up 83 percent of the total business volume, a significant expansion from the 49.3 percent in 2012. Construction of integrated pipeline galleries has become an increasingly prominent business for MCC.

Built several meters underground, the galleries, which are large enough to allow maintenance access, obviate the need to repeatedly excavate streets either to lay new pipes or to mend or replace old ones. Besides water pipes, power supply conduits and cables as well as communications links can also be routed through the dedicated tunnels.

Confronted with economic downward pressures, China will continue to push forward supply-side structural reform, and urban infrastructure construction will be taken as a multiplier of demand, said Cui Hailong of MCC Capital Engineering & Research Incorporation Ltd.

According to a report on urban underground pipeline exploration by Qianzhan.com, a website tracking science and technology development, during the 13th Five-Year Plan (2016-20) period, urban underground pipelines will amount to 1.48 million km. If these are all placed in galleries, a total of 370,000 km of integrated pipeline galleries will be built, which require as much as 4 trillion yuan ($581.6 billion) in investment.

By this June, integrated pipeline galleries built by MCC have covered 26 provinces, municipalities and autonomous regions, serving 10 national pilot cities, ranking the first in terms of length and quality, according to the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development.

Simultaneously, the company also cut a figure in theme park building by undertaking the construction of Shanghai Disneyland, Chimelong Ocean Kingdom, Universal Studios Singapore and the like.

"Building a theme park is a systematic project, which demands the participation of various professionals and expertise involving creative conception, planning, design, management, building intelligence and construction. The integrated capability developed by MCC is exactly what theme park building needs," said Lei Ming of the MCC Central Research Institute of Building and Construction Co. Ltd.

In the first six months of the year, MCC's net profits increased 11.2 percent year on year, and new contracts amounted to 44.24 billion yuan ($6.43 billion), up 37.8 percent year on year, with 89.8 percent from its non-metallurgical business.

As underlined by the impressive recent performances of MCC, it is possible for state-owned enterprises to turn declining fortunes around. However, sustained and effective reform is crucial to this process.

Copyedited by Dominic James Madar

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