Heilongjiang Province in northeast China is famed for its ice and snow festivals. Qiqihar, its second biggest city, is known for the Songnen Plain, a premier bird habitat that is home to the red-crowned crane. In winter, tourists flock here to enjoy the sights and sounds of a frozen world and few of them know that this lovely city is also the cradle of China's heavy industry.

In Fularji, a district in Qiqihar, rows of small red brick buildings have been standing sentinel for over 60 years. They belong to China First Heavy Industries (CFHI), the first state-owned enterprise (SOE) manufacturing equipment for the country's heavy industry, including mining, petrochemicals and nuclear power.

Historical birth

The CFHI owes its birth to a historical visit in 1950 when Chairman Mao Zedong and Premier Zhou Enlai visited the sprawling Ural Heavy Machinery Building Plant in Yekaterinburg, an ambitious venture by the then Soviet Union to develop the heavy industry as part of a five-year plan. The Chinese leaders realized that China should have its own plant to build machines for the heavy industry and four years later, the First Heavy Machinery Works, the CFHI's predecessor, was established.

It is also the place where Zheng Baofeng grew up in the 1970s. His father was one of the first workers at the plant and Zheng is now the general manager of the CFHI Dalian Nuclear Power and Petrochemical Co. Ltd., a subsidiary of the CFHI in northeast China.

After graduating from university, Zheng began his career at the CFHI in 1993, joining its design and research institute.

His childhood memories and the environment played an important role in making the decision. Residents of Fularji all have some connection with the CFHI, especially Zheng's generation. He received his compulsory education in schools run by the enterprise and lived in the community of CFHI employees.

"My father used to point at the red buildings and tell me he was involved in the construction," Zheng said. His father, who retired over 10 years ago, still likes to know how things are at the CFHI. Every time Zheng visits him, Zheng senior asks about the company's progress.

The CFHI is a valued contributor to China's construction. In 1960, it produced its first 12,500-ton hydraulic press and 1,150-ton blooming mill, used in steel casting to roll out oblong ingots called blooms. It marked the start of machine manufacturing and opened a new chapter in China's heavy industry history.

The fledgling SOE soon faced an uphill task. To increase production, it needed better roads and transport. Also, it was difficult to get talent in the remote area, where young people tended to leave for greener pastures in big cities.

A solution came up in the form of Dalian, a coastal city with a brisk economic environment. In 1995, a significant decision was made. The company would build a new plant in Dalian, focusing on petrochemicals and nuclear power equipment. So the design and research institute was relocated to the city as part of the plan and Zheng too moved to Dalian.

A forging workshop of CFHI Dalian Nuclear Power and Petrochemical Co. Ltd. in Dalian, Liaoning Province in northeast China (COURTESY PHOTO)

The CFHI spirit

The new company struggled for funds but persisted. Both the workers and leaders were paid only 200 yuan ($28) each month but they soldiered on. Zheng attributes the company's success to this spirit of its people, which made them achieve remarkable results together, sharing both joys and sorrow.

One of the primary tasks of the CFHI is meeting the market demand with its own technology. When President Xi Jinping visited the enterprise in 2018, he said equipment manufacturing is a pillar of the nation as well as a significant component of the real economy, and urged the company to step up indigenous innovation and develop new technologies and products.

The CFHI produced its first hydrogenation reactor in 1988. Used in the petrochemical industry, it is a huge cylindrical chamber where hydrogen is mixed with oil at great pressure to give the oil a longer shelf life. At that time, the technology had to be imported from a Japanese company. Later, the company mastered the core technology and went on building improved versions. Its latest model in 2016 is a 2,400-ton one, showing how far it has come since the first 182-ton prototype.

In December, the CFHI looks to improving its technology to deliver a 3,000-ton hydrogenation reactor to a buyer.

Indigenous technology and complete localization have resulted in breaking overseas monopoly and reducing prices. Now the equipment costs $6,000 per ton compared to the $16,000 per ton for imported products.

In 1999, Zheng was selected to do advanced studies on nuclear equipment for a year. It was a valuable opportunity for him to learn more about nuclear devices. It also meant he would be expected to provide inputs for advanced nuclear device manufacturing.

The CFHI, as one of the earliest companies engaged in manufacturing nuclear power equipment, has provided large amounts of equipment and critical materials for domestic nuclear power plants. For instance, the main equipment of the primary loop of Hualong One was made by the company. Hualong One is a three-loop generation-III nuclear reactor following the highest safety standard.

Till now, the CFHI has provided nearly 5 million tons of equipment and new materials for various industries, including electricity, automobile and aerospace, filling the technical gap in China by manufacturing over 400 industrial products.

A lean phase

After China started reform and opening up in 1978, many similar enterprises, especially in south China, shot ahead, thanks to the region's advantageous business atmosphere, which honed their competitiveness. The CFHI, in contrast, was hemmed in by its geographic restriction, old-fashioned management style and low aspirations.

From 2012, it began to experience an economic downturn and in 2016, its losses reached 5.7 billion yuan ($809.67 million). But most of the staff still remained optimistic, expecting a turning point, sure that the development of the country could not be separated from the CFHI's contribution. However, they were confused why the difficulties had emerged despite the company's advantages in talent and technology.

In 2016, the CFHI appointed a new chairman to launch a radical reform. The new chairman, Liu Mingzhong, had the first critical task of cutting down the large number of managers.

"I couldn't believe it when I heard that management positions would be reshuffled through a novel evaluation," Zheng said. He had been head of a branch for eight years and wanted to grasp the chance for promotion. In the new process, each candidate was to be evaluated by a group of nine experts, who could be from outside the company. Earlier, promotions were decided by the company's leaders.

The new leaders were told to turn their focus to sales and marketing as the operation pattern of the company was revamped to find and meet market demands. "Products and services should be adjusted based on the demands of buyers in the industrial upstream," Zheng said. "Besides more profit, this strategy will also improve the anti-risk capability of the company. "

Within a year, the CFHI had turned the corner. In 2017, it made a profit of 108 million yuan ($15.3 million) after years of losses.

Zheng visualizes further growth on the basis of the CFHI's nuclear power and petrochemical equipment. "My career is woven with the destiny of the CFHI," he said with pride.

Copyedited by Sudeshna Sarkar

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