China News Online March 4th (Zheng Yingying) Chairman of China Baowu Iron and Steel Group Co., Ltd. (hereinafter referred to as "China Baowu") Chen Derong said in an interview in Shanghai on the 4th that in 2019, China Baowu achieved crude steel production 95.22 million tons, surpassing ArcelorMittal with a crude steel output of 89.8 million tons in 2019, ranking first in the world.
As China's No. 1 steel company, China Baowu was reorganized from the new China ’s first large-scale steel company “Wugang” and China ’s super-large steel company “Baosteel”, which was constructed in the early stages of reform and opening up. Shanghai unveiled. At the beginning of its establishment, China Baowu ranked second in the world in terms of annual crude steel output after ArcelorMittal.
Chen Derong said that China ’s steel production capacity currently accounts for 50% of the world ’s total. It is natural that China ’s Baowu output is among the best; but “the world ’s largest” is only the first step and is the most superficial thing. Next, China Baowu will be a professional Integration to improve the efficiency of resource allocation.
Cracking the "cabbage price"
Although the production capacity is nearly 100 million tons, China Baowu cannot "sit back and relax". In the interview, Chen Derong lamented that steel had already been sold at the "cabbage price". "Now steel is only 4,000 yuan (RMB, the same below) for one ton and 2 yuan for one pound."
He said that in the early years when steel was relatively profitable, in order to maintain production, the excess capacity and low efficiency can still be tolerated. However, when the steel capacity is excessive and profits are very thin, it is necessary to strengthen the main industry and develop The steel industry has synergistic multiple industries to enhance efficiency.
According to reports, in addition to the steel manufacturing industry, China Baowu also promotes the development of five areas: “new materials industry, smart service industry, resources and environment industry, industrial park industry (promoting the development of existing assets in old steel bases), and industrial finance industry”. Enterprises jointly build a steel ecosystem.
Data map courtesy of China Baowu
"Hold a group" for development
China Baowu has undergone three "restructurings" in recent years: In 2016, Baosteel and Wuhan Iron and Steel reorganized to form China Baowu; in September 2019, China Baowu reorganized the Maanshan Iron and Steel Group in a market-oriented manner; at the end of 2019, China Baowu Implement the substantial management of Chongqing Iron and Steel.
In response, Chen Derong said in an interview that joint reorganization is the only way for China's steel scale development. He introduced that although China ’s steel output accounts for 50% of global steel, due to the short development history of industrialization, a large number of companies (compared to other companies in the industry) have smaller individual units, are scattered, have lower equipment levels, and are more orderly in the industry. Chaos, so it is necessary to increase the industrial concentration to solve the problem of "small, scattered, low, and chaotic".
Chen Derong said that China Baowu is relatively dominant in the fields of technology, equipment, and talents, but enterprises cannot stop development. Joint reorganization is an inevitable strategy for the development of enterprises to a certain stage. "Today, the entire market is surplus. To build a new factory, we need to fight 'Abandoning the old factory will bring about the loss of national economy and national wealth. At this time, the most effective and economical way is joint reorganization and mergers and acquisitions. "
Chen Derong said that the coalition of Baosteel and Steel is an example of China's supply-side reform, but after the government has a "tangible hand", enterprises should adopt more market-oriented methods to promote development.
"Complementary advantages and reorganization of production capacity will lead to a win-win situation for both parties. We feel that this path should be correct and China Baowu has also improved its competitiveness." He said.
Promote internationalization
China Baowu will also vigorously promote internationalization this year, mainly in: Europe and the United States and along the "Belt and Road".
In an interview, Chen Derong said that in addition to the joint reorganization, Baowu's next step is to increase its share of the international market. He introduced that the European and American steel markets are relatively mature and Chinese steel has a competitive advantage; per capita steel usage along the “Belt and Road” is still low, and there is huge room for market growth. Internationalization will be very important for the further development of China ’s Baowu in the future. Dimension. "
"Baowu's steel production capacity of more than 2 billion tons worldwide has nearly 100 million tons, which also only accounts for about 5%, and the proportion of leading enterprises in mature industries generally reaches 10% to 20%." Chen Derong said.
He believes that although steel is an "ancient" industry, its overall market structure is far from mature and China Baowu has a great opportunity. (Finish)