Baowu Steel Group to hold controlling stake in Chongqing Iron & Steel
2019-07-02 14:53:19 [Print]
On 28 June, Chen Derong, Chairman of China Baowu Steel Group, stated at the second round of equity financing press conference of ouyeel.com, an e-commerce platform under Baowu Steel, that the group expects to hold controlling stake in Chongqing Iron & Steel in the near future.
Chen Derong also noted that according to the current plan, Chongqing Iron & Steel will own an annual production capacity of 10 million tons after the technical reform is finished. By the end of 2020, Baowu Steel will see an annual production capacity of 100 million tons.
In July 2017, the judicial restructuring was carried out in Chongqing Iron & Steel. In the same year, Changshou Iron & Steel, which was established by Siyuanhe (Shanghai) Iron & Steel Industry Equity Investment Fund Center and Chongqing Strategic Emerging Industry Equity Investment Fund with an investment of RMB3 billion (USD0.44 billion) and RMB1 billion (USD0.15 billion) respectively, joined the restructuring of Chongqing Iron & Steel as an investor.
With a total scale of RMB80 billion (USD11.67 billion), Siyuanhe Fund is the first Chinese iron & steel industry structural adjustment fund jointly set up by Baowu Steel, WL Ross Holding, U.S.-China Green Fund and China Merchants Financial Services Business Unit. Siyuanhe Equity Investment is the general partner. Therefore, Baowu Steel will be an indirect shareholder of Chongqing Iron & Steel after the restructuring.
In June 2019, Masteel Group announced that it would be reorganized by Baowu Steel and Anhui Provincial State-owned Assets Supervision and Administration Commission would transfer 51% equities of Masteel Group to Baowu Steel for free. At the end of June, State-owned Assets Supervision and Administration Commission of the State Council approved this transfer plan. By then, Baowu Steel's total production capacity of iron and steel reached 90 million tons.
During the above news conference, Chen Derong said that Baowu Steel may achieve its goal in advance if the group sees an actual output of 100 million tons in 2020.
The abovementioned goal is to become a global leader and world-class enterprise group of iron and steel based on 2016-2021 Development Plan for China Baowu Steel Group Corporation Limited, a five-year strategic plan released on 27 November, 2017.
According to this plan, Baowu Steel should initially form six business units in 2016-2018 and keep an annual production capacity of 70-80 million tons of iron and steel. In terms of region, Baowu Steel should set up a layout that matches with "One Belt One Road" initiative and the strategy of Yangtze River Economic Belt. In terms of product structure, Baowu Steel should keep optimizing product structure, take over 60% of market shares in high-end domestic market and strengthen market control in China and influence in overseas market. Meanwhile, Baowu Steel should basically finish internal integration of five related industries, initially forming a business system that integrates production and internet, combines production with financing and combines production with city and initially finish construction of green intelligent iron and steel industrial ecologic chain and cultivating a number of enterprises with an operation avenue of over RMB10 billion (USD1.46 billion) and a profit of over RMB1 billion (USD0.15 billion). The second step is to increase Baowu Steel's production capacity of iron and steel from 80 million tons to 100 million tons from 2019-2021. During the same period, Baowu Steel should develop six business units in a coordinated way in order to be a competitive iron and steel industry capital investment company in the world.
Chen Derong said at the press conference in 2017, "By 2021, Baowu Steel's production target of 100 million tons will be supplied to both Chinese market and overseas market. Besides, more than 80% of the target is high-quality steel, mainly including carbon steel, stainless steel and special steel."
Chen Derong also noted that according to the current plan, Chongqing Iron & Steel will own an annual production capacity of 10 million tons after the technical reform is finished. By the end of 2020, Baowu Steel will see an annual production capacity of 100 million tons.
In July 2017, the judicial restructuring was carried out in Chongqing Iron & Steel. In the same year, Changshou Iron & Steel, which was established by Siyuanhe (Shanghai) Iron & Steel Industry Equity Investment Fund Center and Chongqing Strategic Emerging Industry Equity Investment Fund with an investment of RMB3 billion (USD0.44 billion) and RMB1 billion (USD0.15 billion) respectively, joined the restructuring of Chongqing Iron & Steel as an investor.
With a total scale of RMB80 billion (USD11.67 billion), Siyuanhe Fund is the first Chinese iron & steel industry structural adjustment fund jointly set up by Baowu Steel, WL Ross Holding, U.S.-China Green Fund and China Merchants Financial Services Business Unit. Siyuanhe Equity Investment is the general partner. Therefore, Baowu Steel will be an indirect shareholder of Chongqing Iron & Steel after the restructuring.
In June 2019, Masteel Group announced that it would be reorganized by Baowu Steel and Anhui Provincial State-owned Assets Supervision and Administration Commission would transfer 51% equities of Masteel Group to Baowu Steel for free. At the end of June, State-owned Assets Supervision and Administration Commission of the State Council approved this transfer plan. By then, Baowu Steel's total production capacity of iron and steel reached 90 million tons.
During the above news conference, Chen Derong said that Baowu Steel may achieve its goal in advance if the group sees an actual output of 100 million tons in 2020.
The abovementioned goal is to become a global leader and world-class enterprise group of iron and steel based on 2016-2021 Development Plan for China Baowu Steel Group Corporation Limited, a five-year strategic plan released on 27 November, 2017.
According to this plan, Baowu Steel should initially form six business units in 2016-2018 and keep an annual production capacity of 70-80 million tons of iron and steel. In terms of region, Baowu Steel should set up a layout that matches with "One Belt One Road" initiative and the strategy of Yangtze River Economic Belt. In terms of product structure, Baowu Steel should keep optimizing product structure, take over 60% of market shares in high-end domestic market and strengthen market control in China and influence in overseas market. Meanwhile, Baowu Steel should basically finish internal integration of five related industries, initially forming a business system that integrates production and internet, combines production with financing and combines production with city and initially finish construction of green intelligent iron and steel industrial ecologic chain and cultivating a number of enterprises with an operation avenue of over RMB10 billion (USD1.46 billion) and a profit of over RMB1 billion (USD0.15 billion). The second step is to increase Baowu Steel's production capacity of iron and steel from 80 million tons to 100 million tons from 2019-2021. During the same period, Baowu Steel should develop six business units in a coordinated way in order to be a competitive iron and steel industry capital investment company in the world.
Chen Derong said at the press conference in 2017, "By 2021, Baowu Steel's production target of 100 million tons will be supplied to both Chinese market and overseas market. Besides, more than 80% of the target is high-quality steel, mainly including carbon steel, stainless steel and special steel."
