After the introduction of the provincial plan for metallurgical revitalization in Shanxi Province, the neighboring Shaanxi Province has also formulated a plan for revitalization. Unlike Shanxi, which owns a large steel group, Shaanxi Province can only reorganize the three steel companies in the province into one Shaanxi Iron and Steel Group with a target of 10 million tons.
According to the Implementation Plan for the Adjustment and Revitalization Plan of the Iron and Steel Industry of Shaanxi Province (hereinafter referred to as the “Programâ€), Shaanxi Province will use Hanzhong Iron and Steel (Group) Co., Ltd. (hereinafter referred to as “Hansteelâ€) and Shaanxi Lueyang Iron & Steel Co., Ltd. (below Called "Lian Gang" and Shaanxi Longmen Iron & Steel (Group) Co., Ltd. (hereinafter referred to as "Longgang"), three groups were established as Shaanxi Iron and Steel Group.
In total, Shaanxi Province owns only the above-mentioned three steel companies and has more than 5 million tons of crude steel and steel production capacity. Data show that in 2008 Shaanxi Province produced a total of 3.095 million tons of crude steel, 500.98 million tons of steel and 2.908 million tons of pig iron.
An official of Shaanxi Provincial Development and Reform Commission Industry Department told CBN reporter yesterday that the province does not have a particularly advantageous company. Among the three companies, Longgang has the largest production capacity, which is more than 3 million tons.
As there is no leading enterprise to play a leading role, the task of establishing a provincial steel group in Shaanxi is very difficult. The above officials revealed that Shaanxi planned to form Shaanxi Iron and Steel Group a few years ago. However, due to the disagreement of all parties, it has not been realized.
It is worth noting that Shaanxi Iron and Steel Group has not only not been set up, but it has become increasingly difficult to reorganize. UBS Investment Steel Researcher Niu Wei told CBN reporter that Liangang has been acquired by a private company in Shaanxi and is currently a private enterprise. In May 2003, Dongling Group and Lueyang Iron & Steel Co., Ltd. signed a framework agreement for controlling the operation and set up the existing Liansteel.
Due to the poor competitiveness of iron and steel enterprises, during the two sessions this year, representatives of Shaanxi Provincial People's Congress submitted the "Proposal on the Integration of Iron and Steel Industry in Hanzhong City." On April 16th, the Shaanxi Development and Reform Commission replied that “Although the province’s iron and steel companies have not reconciled their opinions on the integration of cities and companies, the determination of integration cannot be shaken and the pace of integration must be accelerated.â€
A senior management of Longgang told CBN reporter yesterday that everything needs to be reorganized according to the planning in the province, and the integration is very useful for improving the competitiveness of the company.
For the restructuring step, officials of the Shaanxi Provincial Development and Reform Commission revealed that the province decided to make the integration of Hansteel and Liangang steel companies one step ahead. "But Shaanxi Iron and Steel Group must be established, with a target of 10 million tons," said the official.
The formation of the Shaanxi Iron and Steel Group is of great significance to Shaanxi Province and is imminent. According to Nguyen Nguyen, the current province's steel production in Shaanxi Province cannot meet the consumption needs of the entire province, so it is necessary to import large amounts of steel from other provinces every year.
Nguyen said that the three steel companies in Shaanxi mainly produce rods and wires. Even if these building materials need to be purchased from other provinces, steel products such as coils and medium plates that cannot be produced in this province need to be purchased from other provinces. Due to the backward production capacity of the three iron and steel companies, Jiuquan, Bayi Steel and Handan Steel have seized market share in the Shaanxi market.
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