China Iron and steel industry restructuring curtain finally opened. Yesterday, Wuhan Iron and Steel shares and Baosteel announced that the two companies are planning a strategic restructuring, the restructuring plan has not yet been determined, the program must be approved by the relevant authorities. At the same time the two companies announced today that both the suspension. Iron and steel giant reorganization of the news spread has been a long time, at this time to pull the curtain, it coincides with the time.
Iron and steel industry restructuring coincides with the time
Since last year, a huge loss of iron and steel industry, overcapacity in the background, the country to promote the steel industry to the supply side of the structural reform of the supply side.
This year on May 23, in the Wuhan Steel Corporation Group study period, clinching the Premier Li Keqiang, the scene, the Wuhan Iron and Steel Group is included in the iron and steel industry capacity to pilot. Li Keqiang said that the Wuhan Iron and steel in the history of the country has made important contributions to. But the reality is that the iron and steel industry does exist overcapacity. For Wuhan Iron and steel, from the point of view of the transport radius, the production of crude steel and other products, far less competitive than the coastal areas. Therefore it is necessary to use the zhuangshiduanwan determination and courage, resolve the overcapacity.
The Ministry was released in March last year, the "iron and steel industry adjustment policy (2015 amendment (Draft)" in the proposed, by 2025, the top ten iron and steel enterprise (Group) crude steel production accounted for the proportion of not less than 60%, the formation of 3 - 5 in the global scope has strong competitive force of super large iron and steel enterprise group, and a number of regional market, subdivision market leading enterprises.
Industry experts pointed out that the iron and steel industry as "industrial food", needs a stable and orderly market environment and need large enterprises play a role in "ballast", through the reorganization and integration can improve today's chaotic and low end of the market competition. "Japan and South Korea two giant Nippon Steel and POSCO, in the domestic status and influence and no one, this super enterprises, to protect the long-term stability of a country's basic industry, and help push the country industrial and participate in the global competition."
Central enterprises restructuring can turn around
Baosteel, iron and steel, Wuhan Iron and steel three central enterprises is the traditional sense of the three giants in the domestic steel industry". Since last year, the State Council, the SASAC constantly promote the reform of the central enterprises and the intensity of mergers and acquisitions. Experts believe that Baosteel, Wuhan Iron and steel restructuring, both to promote the steel industry to production capacity, stable market environment, but also bigger and stronger central enterprises, to enhance the efficiency of state-owned enterprises need.
First of all, the restructuring will be expected to decline in corporate losses to stop bleeding". Since last year, the national iron and steel industry in huge losses, CISA hundreds of large and medium-sized member enterprise main business annual accumulated losses of more than 1000 billion yuan, an increase of loss of 24 times. Wuhan Iron and Steel shares 75 billion yuan of the huge loss to become Shanghai and Shenzhen in the largest amount of loss of enterprise, has become the domestic steel industry in the most difficult enterprise. In the first quarter of this year, Wuhan Iron and Steel shares fell more than 93% profit once again.
Baosteel last year, net profit of more than 1 billion yuan, although still lead the domestic steel industry, but also a substantial decline of 82.51% over the previous year, the profit for the 18 year low. However, in the first quarter of this year, Baosteel profits reached an astonishing four million yuan, an increase of more than four million yuan in the fourth quarter of last year.
Baosteel and Wuhan Iron and steel status, reflecting the current trend of polarization of the steel industry, but also to prove the necessity of the reorganization.
Higher costs or gains
Baosteel and Wuhan Iron and steel restructuring is the integration of the two giants of the enterprise, its complexity far more than past restructuring projects. Meanwhile, the Wuhan Iron and steel so far is still mired in the mire of loss, the enterprise to capacity, job placement and other heavy burden, these will become the cost of restructuring and integration process must be paid.
Reorganization and integration in the difficult market environment, must pay high cost, but after the reorganization, if can as soon as possible to cross the running in period, because of the restructuring of the economies of scale and synergy bonuses, will far exceed the cost.
Wuhan Iron and steel group party secretary, chairman Ma Guoqiang in the beginning of this year to the media said that Baosteel and Wuhan Iron and steel production time difference of 30 years, resulting in WISCO burden than Baosteel Heavy, burden on the one hand, from a large number of personnel costs of low degree of automation, and product structure of profitability difference. And from the product, the vast majority of the same two companies, but the highest profitability in the automotive panel products, Baosteel technology leader in the Wuhan Iron and steel.
Reorganization and integration between the two. If you can properly solve the triage personnel placement problem, can bring many benefits, such as WISCO can rapidly enhance the technical capabilities, the two companies in the same products competition can be avoided.
From the future development direction, the integration of the two will bring greater imagination. Wuhan Iron and steel in the northern Gulf of layout project of Guangxi Fangchenggang and Baosteel Zhanjiang project almost at the same time approved Kaijian, at present is to proceed. Once Baosteel Wuhan Iron and steel restructuring is completed, the two major projects will naturally shift from competition to collaboration, to lead the future development of China's iron and steel industry, the key force.