Chinese largest overseas investment projects in iron and steel formally signed in September 10th, Chinesecapacity of the largest steel enterprises in Hebei iron and Steel Group to start the construction of 5000000 tons of steel project in South africa. In the current iron and steel industry overcapacity and experience winter background,River Steel Group recently become a few nuggets Africa steel prices against the market trend.
Hebei iron and Steel Group in recent years, speed up the pace to go out, as of the end of 2013, River steel groupcontrol operating overseas assets of over $2600000000, the initial formation of the mining industry, financialindustry, trade platform based overseas assets structure.
According to the Hebei iron and Steel Group blueprint, three years South Africa bases will be built into a sales income of more than 10 billion yuan of overseas business. Hebei iron and Steel Group Chairman Yu Yong in signing the said: "South African steel project is the rational choice of Hebei iron and steel group facing themarket."
At present Africa iron and steel industry is an important strategic region in non enterprise cooperation, as with theHebei iron and Steel Group, to steel enterprises in the overseas gold also have to invest in overseas markets,including Africa. But after the project process is tortuous, risks remain, most of them did not reach the expected profit effect, even failed.
Ultra billion sales target
This is known as the largest Chinese overseas investment in construction of whole process of iron and steelprojects, two construction design: a period of long products 3000000 tons, plans started construction in 2015, put into operation before the end of 2017 two period; H type steel plate, or 2000000 tons of rail production line,production plan in 2019.
This is not Hebei iron and Steel Group first overseas gold, in early 2012 April, River Steel Groups $200000000plus take Alder long mineral company two into equity and equity related iron ore. In August last year, Hebei iron and Steel Group to acquire PMC mineral company, then took control of South Africa about 2.7 tons of high grade iron ore resources, 2 tons of copper ore resources and the worlds third largest vermiculite ore.
According to the time of acquisition agreement, Hebei iron and Steel Group to take the lead, and Tianjin products group, Jun an united body company, China Africa development fund jointly established, with the South AfricanIndustrial Development Corporation jointly invested $493000000, a 74.5% stake in the company to subscribe for the South PMC. After the success of the acquisition of Hebei iron and Steel Group accounted for 35% of the shares in them, will dominate the operation and management of PMC company with the biggest shareholder identity.
Yu Yong in signing the said: "the start of South Africa project will use the PMC magnetite resources and South African steel market price advantage, the formation of 5000000 tons of steel quality and productivity in South africa."
It is understood, after the completion of the project, not only Hebei iron and Steel Group will market and monopolyin South Africa of the international steel giant Mittal form differentiated competition, also rely on the project generated logistics, mineral, energy and other benefit, the next three years for Hebei iron and steel group withsales of over 10 billion US dollars.
Hebei iron and steel group from 2008 from Tangshan Iron and Steel Group and Handan Iron and Steel Group andcombination group built large-scale iron and steel enterprises, annual steel output by 31080000 tons increased to 45790000 tons. In the current overcapacity situation, Hebei iron and Steel Group "went to the" Africa expand capacity, one of the background also lies in the Hebei industrial structure adjustment policy and the national iron and steel industry is encouraged to go out strategy to promote the development of.
Both risks and benefits
China steel enterprises to Africa Denver has had many experiences, both large steel enterprises investmentincluding China Steel Group, Shougang and Baosteel. But out of nearly ten years of development and operation,is still not optimistic.
China Steel Group in the early 1990 s the first in South Africa to invest and build factories, the current steel in themain projects in South Africa including South Africa chromium steel industry limited company and steel - one canchromium Industry Co. ltd.. But after years of operating, still encounter difficulties, and even had a single monthSouth African chromium steel industry losses of about 30000000 yuan dilemma. In addition, due to the existence of solution of BEE shareholders interests distribution, underwriting rights and other problems, the steel in theSouth African chromium industry assets face greater risk.
And the same group of sea Investment Shougang also have their own troubles. Iron ore to spend 120000000 yuan to buy the Peru state-owned Hierrode Peru Shougang International Trade & Engineering Company, howeverdue to poor management and workers cultural differences between the two countries has led to most of the time inthe past 8 years have suffered uninterrupted strikes, Shougang in the iron ore mine in Peru once only canachieve balance of income.
For the expansion of steel production capacity in the overseas, overseas money to build steel mills have. In 2007,Baosteel Group and Brazil iron ore supplier CVRD joint venture partners in Baosteel CSV Steel Corp. Wuhan Iron and steel had at the end of 2009 to invest $400000000 investment in Brazil EBX group company MMX, which was the Chinese in overseas construction of the largest steel mills, was China in Brazil biggest investment.
After nearly half a year, the Wuhan Iron and steel invested $5000000000 and LLX Logistica in Brazil Rio De Janeiro port industrial zone to build a steel plant. However, just two years after it stalled, Wuhan Iron and steelplant building project in Brazil, and overseas investment after a change of the radical, cautious.
Compared with the overseas investment weakened, this year the domestic steel enterprises investment is alsorelatively reduced. According to the Chinese iron and steel industry association data, 1-7 months of this yearcompared to the same period in iron and steel industry investment continued to decline, the new project is greatly reduced, is the countrys 19 big industries 56 sub industry growth rate of investment in the biggest declineindustry.