May 19, 2024

88 households changed to 10 Hebei Hebei Iron and Steel reorganization storm

Hebei Province, the largest province of steel, is setting off a storm of mergers and acquisitions in the steel industry.

According to the recently issued “Opinions of the People’s Government of Hebei Province on controlling steel production capacity to accelerate energy conservation and emission reduction to accelerate the structural adjustment of the steel industry” (hereinafter referred to as the “Opinions”), Hebei Province will cultivate 3 to 5 families with strong strength and Large steel enterprise groups with obvious competitive advantages, by the end of the “Twelfth Five-Year Plan”, the number of steel enterprises (groups) with smelting capacity in the province has been reduced to about 10.

“At present, there are about 88 enterprises with smelting capacity in Hebei Province, and 41 enterprises with a steel production capacity of over 1 million tons. In principle, these enterprises must be reorganized.” Deputy of Hebei Metallurgical Industry Association participating in the reorganization plan President Song Jijun revealed in an interview with the "First Financial Daily" yesterday.

3~5 key enterprises are emerging
According to Song Jijun, several candidate companies have been initially drafted as the mainstay of mergers and acquisitions, including Hebei Iron and Steel Group, Tangshan Bohai Iron and Steel Group, Tangshan Great Wall Iron and Steel Group, Hebei Xinwuan Iron and Steel Group, Hebei Jinxi Iron and Steel Co., Ltd., Hebei Zongheng Iron and Steel Co., Ltd. Group Ltd. and so on.

Hebei Iron and Steel Group is the largest state-owned steel enterprise in Hebei Province formed by the merger of Tangshan Steel, Handan Iron and Steel and Chenggang. Tangshan Bohai Iron and Steel Group was formed by the participation of 12 private steel companies. Tangshan Great Wall Steel Group is formed by 27 private mining, steel, coking and logistics enterprises. Hebei Jinxi Iron & Steel Co., Ltd. is the core asset of China Eastern Group (00581.HK), and China Eastern Group is owned by ArcelorMittal, the world's largest steel company. Hebei Zongheng Steel Group Co., Ltd. also has a foreign investment and is a Sino-foreign joint venture.

According to this newspaper, as of now, among these companies, Tangshan Bohai Iron and Steel Group and Tangshan Great Wall Steel Group have been reorganized for nearly two years, and they have always been inconsistent. In the procurement, sales and other aspects, the members of the group have always been Independently carried out.

“The focus is on supporting these companies to make substantial progress. These companies are the main players and carry out mergers and acquisitions in the provinces. In these larger enterprises, it is necessary to see who can develop and see who can achieve substantive Progress, focus on who to support." Song Jijun said.

The "Opinions" emphasize that the relevant district and city governments in Hebei Province should submit the local merger and reorganization plan for steel enterprises from 2010 to 2011 to the Hebei Provincial Department of Industry and Information Technology before the end of November 2010.

Perhaps it is the pressure brought by the coal merger and reorganization storm that took place in Shanxi Province last year. The Hebei provincial government said that it encourages the support of the restructuring of upstream and downstream industrial chains, creates new advantages, new ways and new models for restructuring and integration, and promotes the restructuring of the steel industry in the province. Take a new step.

The senior officials of Hebei Delong Iron and Steel Co., Ltd., who had hoped to sell the company to a Russian company, told this newspaper that they did not want to carry out joint restructuring with state-owned enterprises, but the bids of state-owned enterprises were too low. After the final failure of the transaction due to the failure of the regulatory authorities, DeLong Steel has been looking for a new restructuring model.

Integration is imminent
Regarding the reorganization method, Song Jijun said that at present, Hebei Iron and Steel Group's integration of private steel enterprises mainly adopts the mode of “trusted operation and management” for integration. Private enterprises and private enterprises may have some shares to be reorganized by means of shareholding, holding and mergers and acquisitions.

"Entrusted management is a new type of integration model. There are many similar examples in Italy, Brazil and other countries, including South Korea's Pohang Steel is also adopting this integration model." Song Jijun said.

At present, private enterprise Hebei Yongyang Iron and Steel Co., Ltd. plans to reorganize with Hebei Iron and Steel Group in the form of “trust management”.

For the purpose of this restructuring storm, Song Jijun said: "There is no control over the steel industry without restructuring, and there is no way to develop it. Environmental protection is not good."

In the past years, due to the low concentration of the domestic steel industry and the rising production, steel companies have been “card neck” by the three upstream mining companies. The price of iron ore has been rising year after year, which has seriously restricted the development of the steel industry. The business situation is very low.

In addition to the threat to corporate survival, the steel industry's energy-saving and emission reduction results are also very bad. In order to complete the task of energy conservation and emission reduction, starting from September this year, Hebei Province has launched a vigorous policy of limiting electricity and production for the steel industry in the province.

In 2009, Hebei's crude steel output reached 135 million tons, accounting for 24% of the country. Although domestic steel companies have undergone many restructurings in the past few years, if more than 80 steel companies in Hebei Province do not integrate, it is almost impossible for domestic companies to try to increase their voices with the three major mining companies through concentration. .

It is precisely this situation that the Hebei Provincial Government has made up its mind to hope that the steel production of the top five steel companies (groups) in the province will account for the province's output, from 48% in 2009 to 2015. More than 75% of the year.

In order to express its determination, Hebei Province adopted an "iron fist" policy. The "Opinions" emphasizes: "For steel enterprises that are not actively involved in restructuring, they are not allowed to renovate their backward production capacity, and take measures such as shrinking credit and limiting power supply to promote their withdrawal from the steel industry and ensure the smooth restructuring of the steel industry. ."

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