Steel Industry Mergers and Acquisitions
Yesterday, according to an interview with the “Daily Economic Newsâ€, relevant persons who participated in the seminar on mergers, reorganizations, and access conditions of the steel enterprises of the Ministry of Industry and Information Technology said that the draft of a specific guidance plan for the merger, reorganization, and entry conditions of iron and steel enterprises in the steel industry has been formed. , is seeking industry advice, all parties hope to be introduced as soon as possible.
Li Xinchuang, executive vice president of the Metallurgical Industry Planning Institute, told each reporter that the hospital is participating in the formulation of “Improvement Conditions for Iron and Steel Industry†and “Guidelines for Promoting Merger and Restructuring of Iron and Steel Enterprisesâ€, but between enterprises and government authorities There are different views in some aspects and the opinions of all parties are still being sought. However, some analysts believe that because local governments will seek to protect their own interests, this greatly increases the difficulty of cross-regional mergers and acquisitions of large companies.
Eliminating blast furnaces of 400 cubic meters or less According to the reporter's understanding, the "Entry Conditions for the Steel Industry" will stipulate standards and indicators for product quality, environmental protection, energy consumption and comprehensive utilization of resources, production scale, etc. to regulate the entry of iron and steel enterprises, and Based on this, the list of companies that meet the standards will be announced.
Experts believe that the establishment of access conditions is to eliminate backward production capacity. It can be clearly known that in the future 400 cubic meters or less of blast furnaces, 30 tons or less of converters and electric furnaces will be eliminated (72 million tons of outdated ironmaking capacity will be eliminated, and steelmaking Capacity 25 million tons).
Earlier, China's "Policy for the Development of the Iron and Steel Industry" also pointed out that by 2010, 300 cubic meters or less of blast furnaces, 20 tons or less of converters and electric furnaces will be eliminated (100 million tons of outdated ironmaking capacity will be eliminated, and steelmaking capacity will be 55 million tons. ).
In addition, energy conservation and emission reduction may also be an important indicator. The access conditions may indicate that the comprehensive energy consumption of key large and medium-sized enterprises per ton of steel does not exceed 0.62 tons of standard coal, the consumption of new water per ton of steel is less than 5 tons, the emission of tons of steel smoke is less than 1.0 kg, and the carbon dioxide emissions per ton of steel The amount is less than 1.8 kg, the secondary energy basically achieves 100% recycling, and the metallurgical slag is used by nearly 100%. The pollutant emission concentration and total discharge amount are up to the standard.
At this meeting, some experts pointed out that the elimination of outdated production capacity mainly depends on market measures. The scale of relevant equipment is matched by the enterprises themselves and can be classified as guiding opinions and not mandatory requirements.
It is reported that the current outdated production capacity that needs to be eliminated is mainly concentrated in small and medium-sized enterprises, and the construction or expansion of most of the small and medium-sized enterprises' production capacity only needs the approval of the local government.
In response, CBI Steel analysts believe that in the future if the timely introduction and strict implementation of the relevant regulations of the backward production capacity withdrawal mechanism, the improvement of the elimination of backward production capacity standards may continue to increase the difficulty of controlling total capacity. Due to the existence of drivers of local interest protection, new production capacity or capacity expansion is easier to approve, so that most of the medium-sized companies will be able to replace backward production capacity through new capacity before eliminating backward production capacity, and the new production capacity will be greater than the eliminated capacity. With backward production capacity, small-scale enterprises can avoid the need to be eliminated by appropriate expansion and expansion of existing production capacity within the phase-out range.
The top five steel production capacity should account for 45% of the country
The “Guidelines for Promoting the Merger and Reorganization of Iron and Steel Enterprises†was presented at the meeting. It clearly stated that through mergers and reorganizations, it will focus on cultivating 3 to 5 companies with strong international competitiveness and actively promote 6 to 7 iron and steel enterprise groups with strong capabilities in the country. Implement a strategic merger and reorganization within the scope. Seven companies including Baosteel, Angang, Wuhan Iron and Steel, Hebei Iron and Steel, Shandong Iron and Steel, Shagang, and Bohai Iron and Steel participated in the meeting.
According to the above experts, the country hopes to adopt mergers and reorganizations within the industry and strive to form over 50 million tons of extra-large iron and steel enterprises with strong international competitiveness, such as Baosteel Group, Anbu Group, and Wuhan Iron & Steel Group; In the 10 million to 30 million tons of large-scale steel companies.
The goal of mergers and reorganizations is to hope that the ratio of the top five steel producers in China to the national production capacity will exceed 45%, and that of the coastal iron and steel enterprises in China will reach 40%.
Last year, the degree of concentration of China's steel industry has increased significantly. Shagang has reorganized Jiangsu Yonggang; Baosteel has reorganized Guanggang and Shaogang; Wuhan Iron and Steel has reorganized Liuzhou Steel; Jinan Steel and Laiwu Steel have established Shandong Iron and Steel Group; Tangshan Iron and Steel The establishment of Hebei Iron and Steel Group and other industries to form integration, but the top ten steel companies account for about 44.13% of the country's steel production, far below the EU, the United States, Japan, South Korea.
Cross-regional M&A Difficulty for Large Companies Increases Although the pace of mergers and reorganizations of China's steel companies may accelerate this year, some experts believe that the trend of mergers and reorganizations in the region is also accelerating. This has caused large-scale enterprises to face greater resistance to mergers and reorganizations across regions. On the other hand, mergers and acquisitions are currently only at the scale of scale expansion, and the effectiveness of mergers and reorganizations is still relatively low.
The above analysts believe that due to the large proportion of state-owned or state-controlled enterprises in large and medium-sized steel companies in China, this determines that the government is the dominant player in mergers and acquisitions of iron and steel companies, and that steel enterprises account for the proportion of local government fiscal revenue. As a result, the local government's enthusiasm for supporting large-scale local iron and steel companies to outgrow their own interests is greater than the enthusiasm of regional mergers and reorganizations. It has also become a large-scale state-owned enterprise such as Baosteel, Anshan Iron and Steel and Wuhan Iron and Steel Corporation. One of the reasons why mergers and reorganizations were slow and turned to invest in new capacity projects.
If the trend of mergers and reorganizations in the region is accelerating, more large-scale enterprise groups will be formed in the region, which will increase the difficulty of cross-regional restructuring, will not meet the requirements of the national government in accordance with the principle of survival of the fittest, and encourage the merger of large and powerful enterprise groups. The purpose of the reorganization.
According to insiders, currently the mode of merger and reorganization of steel companies in the region is mainly the readjustment and adjustment of state-owned assets. The merger and reorganization of enterprises is still mainly at the scale of expansion. Although the expansion of production scale is a key factor to improve the efficiency and competitiveness of steel industry However, most of the merged and restructured enterprises are still independently accounted for and operated independently. They have not reorganized their business processes, and they have not been able to exert the effectiveness of scale expansion before the merger and reorganization.