The hottest steel enterprises meet the peak of res

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On August 4, the China Iron and Steel Industry Association (hereinafter referred to as CISA) released the latest statistical data. In the first half of 2016, the member enterprises of CISA achieved a sales revenue of 1.29 trillion yuan, a year-on-year decrease of 11.93%, and a profit of 12.587 billion yuan, a year-on-year increase of 4.27 times, The loss of loss making enterprises decreased by 22.8% year-on-year. From the data performance, the steel industry hit the bottom and rebounded, but the general pattern of the environment faced by the steel industry has not changed. The sales profit margin of these enterprises is only 0.97%, which is still at a low level in the industrial industry

what is more serious is that the national capacity reduction plan is currently designed to avoid new power line twists. Schematic diagram 1 description of the mode items that can be realized by the experimental machine notes: the swing angle of the test mode is more than half, but the completion of the task is not more than half. De capacity has once again become a focus of current economic work, and the voice of iron and steel enterprises to de capacity through mergers and acquisitions is also rising. Following the confirmation of the reorganization of Baosteel Group and WISCO group, Hebei Iron and steel and Shougang also heard the news of merger

"there may be subsequent restructuring in the industry." Liu Xinwei, an iron and steel analyst, told the author that today, the state's requirements for reducing production capacity in the iron and steel industry are unprecedented, and the production capacity task is forced. China's iron and steel industry will lead to a new round of restructuring climax

however, in the last round of restructuring of China's steel industry, the regret of integration but disagreement still exists, and the suspicion of government level matchmaking has not been eliminated. "In the new round of restructuring process, steel enterprises should avoid the problem of low success rate of past restructuring," a senior person in the steel industry who asked to remain anonymous also said that the real restructuring path needs to be promoted by enterprises in a market-oriented manner, We should combine freely from the aspects of enterprise complementarity and product structure, and give play to the strength of the market

in fact, at present, the government has also been aware of the above problems, and proposed the idea of large-scale structural restructuring for the first time in the "13th five year plan" development goals

the expectation of large-scale restructuring

the work of reducing production capacity in the steel industry has been listed as the first important task of the 2016 central economic work conference to make the jaws symmetrically clamp the samples as required. Whether it is the "13th five year plan" or for the steel industry, a number of special policies frequently appear. "The intensity and importance of relevant policies are unprecedented." The above industry insiders said that the state is very determined to reduce the production capacity of the steel industry this time, and the merger and reorganization methods associated with the reduction of production capacity are also regarded as the focus of current attention

before the current popular merger of Baosteel and WISCO, China's iron and steel industry had actually carried out a large-scale merger and reorganization. Among them, Baosteel took the initiative to acquire Shaogang group and Bayi Iron and steel, WISCO Group acquired Kunming Iron and Steel Group and Liuzhou Iron and steel group across provinces, and the merger of Angang and Panzhihua Iron and steel also made the production capacity of Southwest China relatively concentrated

According to the "Research Report on market analysis and development strategy of China's iron and steel industry" released by industry information, since 1997, China's iron and steel enterprises have begun mergers and acquisitions, peaking in 2007 and 2008. So far, there have been about 80 cases, including 42 intra provincial mergers and acquisitions, 30 inter provincial mergers and acquisitions, and 8 cross-border mergers and acquisitions, accounting for 52.5%, 37.5% and 10% respectively

among them, the leading role of central enterprises is obvious, leading 25 mergers and acquisitions, accounting for 31.25%, and 34 mergers and acquisitions led by local state-owned steel enterprises, accounting for 42.5%

"at that time, the restructuring of the series changed the pattern of China's steel industry." These people also said that this round of restructuring basically combed the distribution pattern of China's steel industry by region, but unfortunately, the integration effect of these steel enterprises is not very good, and the concentration of the steel industry is still declining year by year

according to the data of the Ministry of industry and information technology, in 2013, the output of China's top 10 crude steel enterprises accounted for 39.4% of the country's total output, with a year-on-year decrease of 6.5 percentage points. In 2014, this data was updated to 36.6%, while in 2015, it decreased to 34.2%

"among the top ten domestic steel enterprises, the size of a single steel enterprise after the fifth place is only about 20million tons." According to Liu Xin's observation until the sample was destroyed, even if the current rumored North South steel group was really established, it still could not surpass ArcelorMittal Steel Group, which currently ranks first in the world, with an output of nearly 100 million tons

integration but inconsistency has become another remaining problem in the last round of restructuring. In December, 2005, WISCO group and Liugang Group signed a joint restructuring agreement. The two sides cooperated to establish Guangxi iron and Steel Group Co., Ltd. and built a 10 million ton steel base project in Fangchenggang, with a planned investment of 60billion to 70billion yuan to build a modern steel complex. However, in 2015, the state owned assets supervision and Administration Commission of Guangxi Province withdrew, and the cross regional reorganization of Liugang and WISCO failed

"after the reorganization of the two enterprises, the internal integration still could not be promoted." An insider of Wuhan Iron and steel group revealed that the treatment of employees of Liuzhou Iron and steel group at that time was better than that of Wuhan Iron and Steel Group, which led to the opposition of employees of Liuzhou Iron and steel group. The management and operation aspects that should be promoted by both parties after the reorganization were not implemented, but simply consolidated in terms of capacity scale

this situation does not only happen to WISCO group. In 2008, Shandong Iron and steel restructured Rizhao Iron and steel, and successively acquired steel enterprises in Qingdao Iron and steel, Qilu iron and steel, and the scale of Shandong Iron and steel expanded rapidly

"unlike the cross provincial restructuring of WISCO group, Shandong Iron and steel restructuring is within the province, and the resistance is relatively small." In the impression of the above industry people, Shandong Iron and steel is a relatively successful case in the last round of steel enterprise restructuring. "But in fact, up to now, these enterprises merged by Shandong Iron and steel are still independent, and the headquarters has no actual financial rights."

the reason for this integration and inconsistency is that the policy guidance at that time did not focus on this. "In the last round of reform, the state focused on the scale expansion of enterprises." Liu Xinwei said that with the help of restructuring, the scale of the enterprise has expanded rapidly, but the policy guidance for the integration after integration is not very clear. Since then, there has been a lack of supervision, and the enterprise itself lacks the motivation for real integration

new restructuring direction

but after the loss of the whole industry in 2015, the de capacity of China's steel industry is imminent. To this end, the State Council's "opinions on resolving excess capacity in the iron and steel industry and achieving poverty relief and development" pointed out that in the next five years, China will further reduce crude steel production capacity by 100million-150million tons. This year, the target is to reduce the production capacity by 45million tons

the difficulty of completing this task is not small. The data released by the national development and Reform Commission recently showed that in the first half of this year, the national steel production capacity was only 13 million tons, only about 30% of the target tasks of this year

"at present, the task of reducing production capacity in China is still very serious." The above industry insiders said that in addition to the supply side reform, the way of reducing production capacity through mergers and acquisitions was regarded as more simple and direct

a few days ago, Feng Fei, Vice Minister of the Ministry of industry and information technology, also stressed that the iron and steel industry should promote the implementation of strategic and disruptive restructuring and industrial transformation and upgrading in combination with capacity reduction

but it is very difficult to completely rely on market-oriented restructuring. In the last round of reform, there were only 19 mergers and acquisitions led by private steel enterprises, accounting for 23.75%, and such mergers and acquisitions were mainly provincial and municipal integration (14), supplemented by cross provincial integration (5), and there was no transnational integration

it is worth noting that the current policy also guides enterprises to change from pursuing scale to chasing more than 1000 stores participating in the "Green Plan" for performance changes. "In many documents, the government is also strengthening the market and enterprises as the real main body of restructuring," Xu Xiangchun said. However, steel enterprises are a heavy asset industry, and if they want to promote restructuring, they mainly face three problems, namely liabilities Personnel employment and restructuring funds. At present, the overall debt ratio of the steel industry has reached about 70%, and enterprises in the depressed industry may also face the pressure of bank lending. If the production capacity reduction policy is introduced, if the relevant supporting policies are not perfect and the financing channels are not coordinated, it is not easy to rely entirely on market forces to encourage restructuring

CISA also revealed that at present, the target documents for capacity reduction across the country have been signed, and the implementation plans have been determined. Eight supporting documents on resolving excess capacity, including bonus and subsidy funds, finance and taxation, finance, employee resettlement, land, environmental protection, quality and safety, have all been released, and this year's basic bonus and subsidy funds have also been distributed to all provinces, regions and cities

"however, these policies are mainly aimed at reducing production capacity, and the supporting policies in the reorganization of enterprises need to be refined." The above industry insiders believe that only by truly letting the market dominate and allowing enterprises to freely combine and restructure from their own needs, can we avoid going back to the old way of restructuring steel enterprises that are integrated but not compatible with "matching"

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