BEIJING, Feb. 15 (Xinhua) -- China will further promote mergers and acquisitions (M&As) in the steel industry to better control capacity, allocate resources and strengthen risk management.
With the de-capacity task coming to an end during the 13th Five-Year Plan period (2016-2020), China's steel industry is gradually turning to structural reforms and will embrace an era of "big steel enterprises".
To achieve the goal that by 2025, the top ten steel enterprises in China will have their capacities account for more than 60 percent of the country’s total steel capacity, M&As will be launched on a large scale in the future.
As a matter of fact, China has made efforts to strengthen the M&As in recent years and enhance the concentration in the steel industry.
In 2016, China Baowu Steel Group Corporation Limited was established by consolidation and restructuring of former Baosteel Group Corporation and Wuhan Iron & Steel (Group) Corporation.
In 2017, CITIC Group strategically reorganized Qingdao Special Steel. Shagang Group and Benxi Steel Group jointly participated in restructuring the Dongbei Special Steel Group. Beijing Jianlong Group also regrouped the Beiman Special Steel.
It is worth noting that recently, Hebei, Jiangsu, Shanxi and other local authorities have successively disclosed relevant goals for the development of the steel industry.
Among them, as of 2020, Hebei Province aims to form a "2310" industrial structure in the steel industry, namely, two internationally competitive enterprises, three locally competitive enterprises, and 10 characteristic steel enterprises. Shanxi Province plans to cut the number of steel enterprises to ten from the current 27.
Qualified enterprises are encouraged to seize the opportunity to carry out cross-regional and cross-ownership M&As, which will hep increase resource integration, balance environmental capacity in different regions, and reduce or avoid homogeneity competition, said Wang Lianzhong, executive deputy secretary-general of China Chamber of Commerce for Metallurgical Enterprises. (Edited by Hu Pingchao, hupingchao@xinhua.org)
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