Steel industry restructuring will deepen

At the “China Steel Industry Restructuring Summit” held on the 26th, experts pointed out that since the beginning of the 21st century, China’s steel industry has developed rapidly, and crude steel production has grown at an average annual rate of 21.1%. However, the long-term extensive development has accumulated increasingly serious contradictions. During the “Twelfth Five-Year Plan” period, China’s steel industry will be restructured to form a number of large steel enterprises with strong independent innovation capabilities and international competitiveness.

Jiang Zhenghua, vice chairman of the National Committee of the Communist Party of China, pointed out that in 2010, China's total crude steel production reached 630 million tons, and the total output of steel products was close to 800 million tons. Steel enterprises should further form joint forces, improve efficiency, and occupy the high end through integration and restructuring.

The Deputy Director of the Development Research Center of the State Council, Hou Yunchun, believes that China's steel industry should further implement the strategy of large companies, give full play to the positive role of large companies in resource allocation, industrial restructuring, and improvement of management levels, and continuously improve industrial competitiveness. Hou Yunchun pointed out that in recent years, Hebei Iron and Steel (000709) Group, which was jointly formed by the original Tangshan Iron and Steel and Handan Iron and Steel, has achieved steady and rapid development, and its comprehensive competitiveness has been significantly enhanced. Under substantial integration, Hebei Iron and Steel Group vigorously implemented the full integration of internal business, personnel, and assets of the company, formed a system of property rights, governance, and management that benefited the Group's further development, demonstrating the synergy of 1+1 greater than 2.

Over the past two years since the reorganization was completed, Hebei Iron and Steel Group's unified development plan has reduced investment in new and increased capacity alone by 57.1 billion yuan, involving 619 projects, cumulatively eliminating backward production capacity by 5.2 million tons, and forming 50 million tons in full compliance with the country. Iron and steel industry development policy superior production capacity. In addition, based on the completion of internal integration, Hebei Iron and Steel also holds a stake in Shigang, reorganizing Xuangong Machinery, and reorganizing 12 private steel companies with “progressive equity integration”.