China Baowu Steel Group

Last updated
China Baowu Steel Group
State-owned enterprise
IndustrySteel
PredecessorShanghai Baosteel Group Corporation
Wuhan Iron and Steel Corporation
Founded
1978(Baosteel)
2016(merger of WISCO and Baosteel)
Headquarters Shanghai, China
Key people
 Ma Guoqiang (Chairman and Party Committee Secretary)
ProductsSteel, flat steel products, long steel products, wire products, plates
Owner Chinese Central Government (100%)
Parent SASAC of the State Council
Subsidiaries see list
Website www.baosteel.com
Footnotes /references
[1]
China Baowu Steel Group Corporation Limited
Simplified Chinese 中国 宝武 钢铁 集团 有限 公司
Traditional Chinese 中國 寶武 鋼鉄 集團 有限 公司
Literal meaningChina Baowu Steel Group Limited [Liability] Corporation
Baowu Steel
Simplified Chinese 宝 武 钢 铁
Traditional Chinese 寶 武 鋼 鉄
Literal meaning Baoshan & Wuhan Iron and Steel

China Baowu Steel Group Corp., Ltd., commonly referred to as Baowu Steel, is a state-owned iron and steel company headquartered in the Baosteel Tower in Pudong, Shanghai, China. [2] The company was formed by Baosteel Group absorbing it smaller state-owned peer, Wuhan Iron and Steel Corporation in 2016.

A state-owned enterprise (SOE) is a business enterprise where the government or state has significant control through full, majority, or significant minority ownership. Defining characteristics of SOEs are their distinct legal form and operation in commercial affairs and activities. While they may also have public policy objectives, SOEs should be differentiated from government agencies or state entities established to pursue purely nonfinancial objectives.

Pudong District & State-level new area in Shanghai, Peoples Republic of China

Pudong is a district of Shanghai located east of the Huangpu River across from the historic city center of Shanghai in Puxi. The name refers to its historic position as "The East Bank" of the Huangpu River, which flows through central Shanghai, although it is now administered as the Pudong New Area, a state-level new area which extends all the way to the East China Sea.

Shanghai Municipality in Peoples Republic of China

Shanghai is one of the four municipalities under the direct administration of the central government of the People's Republic of China, the largest city in China by population, and the largest city proper in the world, with a population of 26.3 million as of 2019. It is a global financial center and transport hub, with the world's busiest container port. Located in the Yangtze River Delta, it sits on the south edge of the estuary of the Yangtze in the middle portion of the Eastern China coast. The municipality borders the provinces of Jiangsu and Zhejiang to the south, east and west, and is bound to the east by the East China Sea.

Contents

Baosteel is the second largest steel producer in the world measured by crude steel output, with an annual output of around 35 million tons (China's total steel production in 2015 was 803.8 million tons [3] ). It employs 130,401 employees as of the end of 2012, has annual revenues of around $21.5 billion, and produces a mix of products. [4]

According to World Steel Association (Chinese companies data was provided by China Iron and Steel Association), the corporation was ranked the 5th in 2015 the world ranking by production volume (2nd in China for 34.938 million metric tons). [5] A plan to merge with Wuhan Iron and Steel Corporation was announced on 21–22 September 2016, [6] which would make the combined production volume the second highest in the world (34.938 million + 25.776 million), after ArcelorMittal (97.136 million in 2015), surpassing Hesteel Group (47.745 million in 2015). Since Baosteel Group and Wuhan Iron and Steel Corporation also announced targets of cutting 3.95 and 4.42 million metric tons production capacity respectively in June [7] and July 2016, [8] and a further cut for Baosteel Group of 2.10 million while a 3.15 million cut was already planned [9] the final ranking may still significantly change.

World Steel Association, often abbreviated as worldsteel, is the international trade body for the iron and steel industry. The association represents over 160 steel producers, national and regional steel industry associations and steel research institutes. World Steel Association members represent around 85% of world steel production.

China Iron and Steel Association is a national, non-profit organization founded in 1999 on the basis of China Metallurgical Enterprise Management Association. CISA members consist of China’s steel enterprises, institutions, societies and individuals in the iron and steel industry, which participate the organization voluntarily according to certain regulations. CISA now has over 119 group members. CISA is made up of 7 administrative bodies with 30 staff and 7 working committees.

ArcelorMittal multinational steel manufacturing corporation

ArcelorMittal S.A. is a multinational steel manufacturing corporation headquartered in Luxembourg City. It was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel. ArcelorMittal is the world's largest steel producer, with an annual crude steel production of 92.5 million metric tonnes as of 2018. It is ranked 123rd in the 2017 Fortune Global 500 ranking of the world's biggest corporations.

The IPO of the subsidiary of Baosteel Group on the Shanghai Stock Exchange in 2000 was the largest in China up to that time, raising CNY 7.7 billion despite being limited to domestic investors only. [10]

Shanghai Stock Exchange Stock exchange in Shanghai, China

The Shanghai Stock Exchange (SSE) is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other being the Shenzhen Stock Exchange. Shanghai Stock Exchange is the world's 4th largest stock market by market capitalization at US$5.5 trillion as of April 2018. Unlike the Hong Kong Stock Exchange, the Shanghai Stock Exchange is still not entirely open to foreign investors and often manipulated by the decisions of the central government. This is due to tight capital account controls exercised by the Chinese mainland authorities.

History

Beginning in 1978, the Chinese government began to institute economic reforms. Plans called for a large integrated steel production facility to be located near the port of Shanghai. The Baoshan District, a suburb of Shanghai, was chosen as the site and Japanese assistance was enlisted in constructing one of the most modern steel plants of the time. As the government's flagship steel company, Baoshan Iron and Steel as it was originally called, benefitted from acquiring the engineers and managers, access to technology, and receiving government contracts.

Baoshan District, Shanghai District in Shanghai, Peoples Republic of China

Baoshan District (help·info), is a suburban district of Shanghai. It has an area of 424.58 square kilometers (163.93 sq mi) and had a population of 1,905,000 at the time of the 2010 Chinese census.

Baoshan Iron and Steel also benefitted from the Chinese economic expansion which consumed all the steel available. However, with the continuing liberalization of the Chinese economy, Baoshan found itself in competition with new rivals, both foreign and domestic. The company decided to add an export trade marketing component to remain competitive; it scored notable success in South Korea. Although hurt by the Asian financial crisis, Baoshan pushed through with a merger of other money losing state owned enterprises, though it had managed to remain profitable itself. On November 17, 1998, the former Baoshan Iron and Steel (Group) Corporation absorbed the Shanghai Metallurgical Holding Group Corporation (上海冶金控股集团公司) and the "Shanghai Meishan Group" (上海梅山集团公司) to form Shanghai Baosteel Group Corporation. The new conglomerate was the largest steel producer in the country with annual steel production of nearly 20 million tons.|date=October 2016}}

South Korea Republic in East Asia

South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. The name Korea is derived from Goguryeo which was one of the great powers in East Asia during its time, ruling most of the Korean Peninsula, Manchuria, parts of the Russian Far East and Inner Mongolia under Gwanggaeto the Great. Its capital, Seoul, is a major global city and half of South Korea's 51 million people live in the Seoul Capital Area, the fourth largest metropolitan economy in the world.

In 1997, a subsidiary of Shanghai Metallurgical Holding, the former Shanghai No.3 Iron and Steel Plant, Shanghai Pudong Iron and Steel, formed a joint venture with ThyssenKrupp of Germany, as Shanghai Krupp Stainless. [11] It followed the parent company to become a subsidiary of Baosteel Group in 1998.

In 2000, a subsidiary Baoshan Iron & Steel Co., Ltd. was formed to list a portion of the group on the Shanghai Stock Exchange, while Shanghai No.1st, 2, 3 and 5 Iron and Steel Plants of the group were remaining unlisted. In 2004, the listed subsidiary acquired Meishan Iron and Steel from Baosteel Group (via Shanghai Meishan Group).

In 2007 Baosteel Group acquired the majority stake of Xinjiang Ba Yi Iron and Steel Group, which was the parent company of Ba Yi Iron and Steel [Company Limited by Shares].

In 2008 Baosteel Group expended in Southern China, which planned to build a new facility in Zhanjiang, Guangdong, which formally started by its subsidiary Baoshan Iron & Steel in 2012, by acquiring 71.8032% stake of Zhanjiang Iron and Steel for CNY4.976 billion from State-owned Assets Supervision and Administration Commission of Guangzhou City.

In 2011, Baosteel Group acquired 51% stake of Guangdong Shaoguan Iron and Steel Group from SASAC of Guangdong Government.

On 21–22 September 2016, a plan to merge Baosteel Group and fellow state-owned steel maker Wuhan Iron and Steel Corporation was announced. Baoshan Iron and Steel Company Limited, the listed portion of Baosteel Group would takeover the counterpart Wuhan Iron and Steel Company Limited in an all-share deal, [12] while the rights of Wuhan Iron and Steel Corporation would be transferred to Baosteel Group for free as a wholly owned subsidiary. Both Baosteel Group and Wuhan Iron and Steel Corporation were supervised by SASAC of the Central Government. As of December 2016, the name of the new group is China Baowu Steel Group Corporation. [13] It is now the second largest steel producer in the world, with assets estimated to be worth around 730 billion Yuan, [14] employing 228,000 employees and expected annual sales revenues of 330 billion Yuan ($47.9 billion). [15]

In 2019, China Baowu Steel Group acquired 51% stake of Masteel Group from the SASAC of Anhui Provincial People's Government  [ zh ] for free. The acquisition also included the indirect controlling stake of the list company Maanshan Iron and Steel Company Limited. [16]

Controversies

In early 2016, Baosteel Group was accused by US Steel Corp. of stealing commercial secrets. Baosteel rejected these allegations, stating that "In particular, the charges claiming that Baosteel stole commercial secrets from U.S. Steel is rootless speculation and subjective assumption, and could even be described as an absurd statement". [17] The International Trade Commission (ITC) launched a probe into these allegations in May 2016. Next to Baosteel, Hebei Iron and Steel Group, Wuhan Iron and Steel Co., Ltd., Maanshan Iron and Steel Company Limited, Anshan Iron and Steel Group and Jiangsu Shagang Group are also under investigation. [18]

Subsidiaries

Equity investments

Baosteel Group was a minority owner of Metallurgical Corporation of China Limited for 0.65% (as at 30 June 2010). [19] Excluding the investment held by the listed subsidiary Baoshan Iron and Steel, Baosteel Group owned 0.88% stake (via Hwabao Investment) in PetroChina Pipelines, the company that runs West–East Gas Pipeline. [20]

Baosteel Group, as at 31 December 2015, still owned 15.11% stake in New China Life Insurance, a listed company in both Hong Kong and Shanghai Stock Exchange, [21] as well as China Bohai Bank for 11.67% stake, [22] China Pacific Insurance for 14.17% stake. [23]

Related Research Articles

Wuhan Iron and Steel Corporation company

Wuhan Iron and Steel (Group) Corporation (WISCO), is a Chinese state-owned enterprise. It started to operate in 1958 in Qingshan, Wuhan, Hubei, China.

Masteel Group Chinese state-owned holding company

Magang (Group) Holding Co., Ltd., or known as Masteel Group, is one of the major Chinese iron and steel enterprises. Since 2019, it is a joint venture of central government owned China Baowu Steel Group and Anhui Provincial People's Government's State-owned Assets Supervision and Administration Commission (SASAC). It is headquartered in Ma'anshan, Anhui province. The group produced iron and steel via its listed subsidiary Maanshan Iron and Steel Company Limited, which was a listed company since 1993. However, the group had a significant part remained unlisted.

Maanshan Iron and Steel Company Limited, known as Maanshan Iron and Steel or just Masteel is a Chinese listed company which engaged in steel manufacturing. The company was based in Ma'anshan, Anhui province. Since its establishment in 1993, it was controlled by the Chinese government. However, the indirect parent company was changed to central government owned China Baowu Steel Group in June 2019, after the Group acquired 51% stake of Masteel Group, the direct parent company of the listed company from the Anhui provincial government.

Wuhan Iron and Steel Co., Ltd. known as WISCO, is a subsidiary of listed steel maker Baoshan Iron and Steel; Wuhan Iron and Steel Co., Ltd. was a subsidiary of state-owned Wuhan Iron and Steel Corporation until 2016. The main business was the steel plant in Qingshan District, Wuhan, while the parent company had transformed from steel making company to holding company and M&A vehicle.

Nanjing Iron and Steel Company Chinese steel manufacturer

Nanjing Iron and Steel Co., Ltd. is a publicly traded steel maker based in Nanjing, Jiangsu Province, China. The parent company of NISCO is Nanjing Nangang Iron and Steel United Co., Ltd., a joint venture of Hong Kong listed company Fosun International and Chinese state-owned enterprise Nanjing Iron and Steel Group in a 60–40 ratio.

Nanjing Iron and Steel Group Corp., Ltd. is a Chinese conglomerate company based in Nanjing, Jiangsu Province, China. It was a state-owned enterprise, but now it is a joint venture of Nanjing Iron and Steel Venture Investment and state-owned enterprise Nanjing New Industrialization Investment Group in a 51–49 ratio. Nanjing Iron and Steel Group formed another joint venture with Fosun International as an intermediate holding company of Nanjing Iron and Steel Company, in a 60–40 ratio. On 31 December 2015 Fosun International appointed Nanjing Iron and Steel Group as a proxy for 1/6 of their voting rights, making the voting rights were equally shared between Nanjing Iron and Steel Group and Fosun International after 31 December 2015.

Hesteel Group company

Hesteel Group Company Limited is a Chinese iron and steel manufacturing conglomerate, also known as Hesteel Group or its pinyin shortname Hegang. The company was also known as Hebei Iron and Steel Group Co., Ltd. or HBIS until 2016.

Dongbei Special Steel Group Co., Ltd. is a state-owned enterprise based in Dalian, Liaoning Province. It was owned by State-owned Assets Supervision and Administration Commission (SASAC) of the Provincial Government of Liaoning (46.1230%) and Heilongjiang (14.5191%), as well as a subsidiary of Liaoning SASAC (22.6839%) and China Orient Asset Management (16.6740%).

Fushun Special Steel Co., Ltd. (FSSS) is a Chinese steel maker based in Fushun, Liaoning Province. State enterprise Dongbei Special Steel was the largest shareholder of the company. The rest of the shares float in Shanghai Stock Exchange.

Dongbei Special Steel Group Beiman Special Steel Co., Ltd. is a state-owned steel maker based in Qiqihar, Heilongjiang Province. Bei-man was the acronym of North Manchuria. The company is a subsidiary of Dongbei Special Steel.

Benxi Steel Group Corp., Ltd. known as Benxi Steel Group is a Chinese holding company based in Benxi, Liaoning Province, for two steel making group.

Baoshan Iron and Steel Co., Ltd., also known as Baoshan Iron and Steel and Baosteel, is a maker of steel based in Shanghai, China, and a subsidiary of China Baowu Steel Group. It is listed on the Shanghai Stock Exchange and is a constituent of the CSI 300 stock market index.

Beijing Shougang Co., Ltd. is a Chinese listed steel manufacturer. It also a subsidiary of Shougang Group. The shares of Beijing Shougang float in the Shenzhen Stock Exchange.

Meishan Iron and Steel

Shanghai Meishan Iron and Steel Co., Ltd., known as Meishan Iron and Steel, or Meisteel or Meigang is a second-tier subsidiary of Baosteel Group and a first-tier subsidiary of listed company Baoshan Iron and Steel Co., Ltd.. The company was based in Nanjing.

Baosteel Group Guangdong Shaoguan Iron and Steel Co., Ltd. known as Shaoguan Iron and Steel or SGIS or Shaogang or Shaosteel is a Chinese steel maker.

Xinjiang Ba Yi Iron and Steel Co., Ltd. known as Ba Yi Iron & Steel or 8 1 Iron & Steel or August 1 Iron & Steel or BYIS or Bagang or Basteel, is a Chinese steel maker based in Ürümqi, Xinjiang. The company was a second-tier subsidiary of China Baowu Steel Group, via Ba Yi Iron and Steel Group. The rest of the shares of the company float in Shanghai Stock Exchange. Xinjiang government is the minority shareholder of the holding company: Ba Yi Iron and Steel Group.

Tianjin Pipe Corporation Chinese state-owned pipe producting company

Tianjin Pipe (Group) Corporation Limited known as Tianjin Pipe or its aberration TPCO, is the largest stemless steel pipe maker of China as well as one of the largest in the world.

CRRC Group Corporation, known as CRRC Group, is a Chinese state-owned holding company, direct parent company of CRRC and 32 other subsidiaries; if including second-tier subsidiaries, the holding company is the head of 112 legal entities.

Huaigang Special Steel

Jiangsu Shagang Group Huaigang Special Steel Co., Ltd. is a Chinese steel manufacturer based in Huai'an, Jiangsu Province. It was a subsidiary of privately held company Shagang Group via its publicly traded subsidiary Shagang Company for 63.79% stake, from 2010 to 2015. As at 31 December 2013, Huaigang accounted for 99.9% revenue and 97% assets of Shagang Company. However, as at 31 December 2015, Shagang Group owned just 19.88% stake in Shagang Company; in turn Shagang Company owned 63.79% stake of Huaigang. Shagang Group sold 55.12% stake of Shagang Company in 2015, for about CN¥4.6 billion.

References

general
specific
  1. ↑ "About Baosteel". Archived from the original on 2011-07-07. Retrieved 2009-12-11.
  2. ↑ "Contact Us." Baosteel. Retrieved on November 10, 2012. "ADD:Baosteel Tower, Pu Dian Road 370, Pudong New District, Shanghai, 200122, P.R. China Postal Code:200122" - Chinese: "上海市浦东新区浦电路370号宝钢大厦"
  3. ↑
  4. ↑ Sirkin, Harold L.; James W. Hemerling; and Arindam K. Bhattacharya (2008-06-11). GLOBALITY: Competing with Everyone from Everywhere for Everything. Archived 2008-09-23 at the Wayback Machine New York: Business Plus, 304. ISBN   0-446-17829-2.
  5. ↑ "Archived copy". Archived from the original on 2016-07-19. Retrieved 2016-07-26.CS1 maint: Archived copy as title (link)
  6. ↑ "China deal to create world's second-largest steelmaker". Financial Times.
  7. ↑ "化解钢铁过剩产能公告" (in Chinese). Baosteel Group. 30 June 2016. Retrieved 4 October 2016.
  8. ↑ "武汉钢铁(集团)公司关于化解过剩产能实施脱困发展的公告" (PDF). Wuhan Iron and Steel Corporation. 7 July 2016. Retrieved 3 October 2016.
  9. ↑ "宝钢实施全方位结构调整和转型升级" (in Chinese). Baosteel Group. 19 August 2016. Retrieved 4 October 2016.
  10. ↑ "China's Baosteel heads for stock market". BBC. 6 November 2000. Retrieved 3 October 2016.
  11. ↑ Company Profile Shanghai Krupp Stainless
  12. ↑ "China's Top Steel Mills Step Closer to Creating Arcelor Rival". Bloomberg. 21 September 2016. Retrieved 3 October 2016.
  13. ↑ "Announcement: Moody's says China Baowu Steel nears full merger with Wuhan Steel; no rating impact". Moody's. Retrieved January 25, 2017.
  14. ↑ Levit, Donald (January 22, 2017). "China's Steel Reform Shifts Into Higher Gear". Economic Calendar. Retrieved January 25, 2017.
  15. ↑ "China Baowu Steel Group officially established". Steel Orbis. December 5, 2016. Retrieved January 25, 2017.
  16. ↑ "Zhōngguó bǎowǔ "wúcháng" shōugòu mǎgāng gāngtiěyè jiānbìng chóngzǔ tísù" 中国宝武“无偿”收购马钢 钢铁业兼并重组提速. 第一财经 (Yicai) (in Chinese). Shanghai. 3 June 2019. Retrieved 18 June 2019.
  17. ↑ "China's Baosteel Group says U.S. Steel accusations groundless". Reuters. April 29, 2016. Retrieved January 25, 2017.
  18. ↑ "U.S. panel launches trade secret theft probe into China steel". Reuters. May 29, 2016. Retrieved January 25, 2017.
  19. ↑ "2010 Interim Report" (PDF). Metallurgical Corporation of China Limited. archive of Hong Kong Stock Exchange. 24 August 2010. Retrieved 3 October 2016.
  20. ↑ "DISCLOSEABLE TRANSACTION, CONNECTED TRANSACTION" (PDF). PetroChina. archive of Hong Kong Stock Exchange. 24 December 2016. Retrieved 3 October 2016.
  21. ↑ "2015 Annual Report" (PDF). New China Life Insurance. archive of Hong Kong Stock Exchange. 17 April 2016. Retrieved 4 October 2016.
  22. ↑ "2015 Annual Report" (PDF). China Bohai Bank. 16 June 2016. Retrieved 17 October 2016.
  23. ↑ "2015 Annual Report" (PDF). China Pacific Insurance. archive of Hong Kong Stock Exchange. 27 April 2016. Retrieved 20 October 2016.
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