1. LINE

      Text:AAAPrint
      Business

      Baosteel, WISCO mull restructuring to create China's top mill

      1
      2016-06-30 09:15Global Times Editor: Li Yan

      China's two leading steel makers, State-owned Baoshan Iron & Steel Co and Wuhan Iron & Steel Co, announced on Sunday that their parent companies are considering a major restructuring, which would be a milestone for the country's efforts to cut capacity and raise efficiency among State-owned enterprises (SOEs). Analysts said that the restructuring of the two major steel makers could be a model for the industry, boosting expectations for more mergers and acquisitions. However, great challenges remain. Analysts said there are always problems integrating major companies, and synergy can be elusive. Restructuring across China's steel industry would be even more complicated because many major steel companies are overseen by regulators at different levels of government, analysts said.

      The rumors turned out to be true.

      The country's two leading steel enterprises, State-owned Baoshan Iron & Steel Co and Wuhan Iron & Steel Co, announced on Sunday that their parent firms, Baosteel Group and Wuhan Iron and Steel (Group) Corp (WISCO), are considering a major restructuring.

      Further moves will be released after five trading days, and trading of both company's shares has been halted since Monday, according to filings on the Shanghai Stock Exchange.

      In terms of output, Baosteel ranked second in 2015 among domestic steel makers, after Hebei-based HeSteel Group Co. WISCO ranked sixth.

      Restructuring of the two companies would create a mega steel enterprise with annual output of more than 60 million tons, the most in China and the second globally after Luxembourg's steel giant ArcelorMittal.

      Restructuring the two State-owned enterprises (SOEs), both of which are overseen by the State-owned Assets Supervision and Administration Commission (SASAC), marks the government's latest effort to cut redundant capacity and further consolidate the sector, analysts said. The deal might also serve as a model for future mergers in the industry.

      A 'model' for the sector

      Mergers and acquisitions have been common in the steel sector as the industry has been caught in a downturn for several years. But in most of those deals, a larger steel company acquires a smaller one. A Baosteel and WISCO merger marks the first case of an alliance between two large firms.

      As industry leaders, Baosteel and WISCO have each acquired smaller steel mills in the past. For instance, Baosteel acquired Xinjiang Bayi Iron & Steel Co in 2007 and Guangdong's Shaoguan Iron & Steel in 2011.

      WISCO bought a controlling stake in Yunnan's Kunming Iron & Steel Holding Co in August 2007.

      But to survive the winter, even industry leaders need to huddle together.

      A merger would greatly increase the competitiveness of both companies, and help them avoid homogenization in their businesses, analysts said.

      The merged company would account for about 71 percent of the country's total capacity of silicon steel, which is used in products like transformers.

      It would also make up roughly 60 percent of the capacity for steel products used in the automobile sector, according to Wang Guoqing, research director at the Beijing Lange Steel Information Research Center.

      Duplicated facility construction can also be avoided and resources can be better deployed, analysts said.

      For instance, the Baosteel plant in Zhanjiang, South China's Guangdong Province, started production in September 2015. It mainly produces steel products for cars and home appliances and targets the southern China and Southeast Asian markets.

      WISCO has a plant in Fangchenggang, South China's Guangxi Zhuang Autonomous Region that targets the same markets.

      The Fangchenggang plant, which is 200 kilometers away from the Zhanjiang plant, started production in March 2016.

      "The restructuring of Baosteel and WISCO would set a model for the industry, which will see more mergers and acquisitions in the future," Wang told the Global Times Monday.

        

      Related news

      MorePhoto

      Most popular in 24h

      MoreTop news

      MoreVideo

      News
      Politics
      Business
      Society
      Culture
      Military
      Sci-tech
      Entertainment
      Sports
      Odd
      Features
      Biz
      Economy
      Travel
      Travel News
      Travel Types
      Events
      Food
      Hotel
      Bar & Club
      Architecture
      Gallery
      Photo
      CNS Photo
      Video
      Video
      Learning Chinese
      Learn About China
      Social Chinese
      Business Chinese
      Buzz Words
      Bilingual
      Resources
      ECNS Wire
      Special Coverage
      Infographics
      Voices
      LINE
      Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
      Copyright ©1999-2018 Chinanews.com. All rights reserved.
      Reproduction in whole or in part without permission is prohibited.
      主站蜘蛛池模板: 处破痛哭A√18成年片免费| 免费视频淫片aa毛片| 亚洲网站免费观看| 国外亚洲成AV人片在线观看 | 亚洲另类古典武侠| 国产精品久免费的黄网站| 亚洲国产日韩视频观看| 免费国产成人高清在线观看麻豆| 国产乱子伦精品免费视频| 91亚洲性爱在线视频| 亚洲成年看片在线观看| 91免费福利精品国产| 无码色偷偷亚洲国内自拍| 久久精品国产亚洲| 久久精品一区二区免费看| 久久亚洲综合色一区二区三区| 国产91免费在线观看| 一区二区三区在线免费观看视频 | 波多野结衣久久高清免费 | 国产男女猛烈无遮挡免费视频网站 | 久久亚洲AV成人无码国产电影| 亚洲人成精品久久久久| 国内大片在线免费看| 国产免费一区二区视频| 亚洲αⅴ无码乱码在线观看性色| 国产亚洲A∨片在线观看| 女人18毛片特级一级免费视频| 免费久久人人爽人人爽av| 国产成人亚洲精品蜜芽影院| 亚洲福利电影在线观看| 亚洲精品自产拍在线观看| 午夜男人一级毛片免费| 免费视频成人片在线观看| 亚洲人xxx日本人18| 亚洲午夜无码久久久久| 日韩免费高清一级毛片在线| 最近2022中文字幕免费视频| 两性色午夜视频免费播放| 免费无码国产在线观国内自拍中文字幕 | AV片在线观看免费| 97在线视频免费播放|