Everything about Shanghai Baosteel Group Corporation totally explained
» For another steel company headquartered in Baotou, Inner Mongolia, please refer to '
Baotou Steel.
Shanghai Baosteel Group Corporation , commonly referred to as
Baosteel is the largest
Chinese iron and
steel conglomerate. It is a
state-owned enterprise, headquartered in
Shanghai.
History
After the disasters of the
Great Leap Forward and the
Cultural Revolution, the Chinese government began to institute economic reforms in the 1970s. 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 best engineers and managers, access to cutting edge technology, and receiving hefty government contracts.
Baoshan Iron and Steel also benefitted from the breakneck pace of Chinese economic expansion which ravenously 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 and the
Shanghai Meishan Group Co. 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.
Baosteel also found partnerships with former domestic rivals in the
Shougang Group and
Wuhan Iron and Steel Group Corporation, entering into an alliance in 2001. In the same year Baosteel signed an agreement with
ThyssenKrupp of
Germany.
The company has ambitious plans for expansion, currently constructing a state-of-the-art facility in
Zhanjiang,
Guangdong, at the cost of $10 billion; it's expected to come into production by the end of the decade. Baosteel also intends on launching an
IPO, likely in
Hong Kong, on top of its current listing on the
Shanghai Stock Exchange.
Industrial Scope
Baosteel is the 6th largest steel producer in the world, ranked by sales (see
list of steel producers). It is the largest steel producer in China, with a crude steel production capacity of about 20 million tons. China's total steel production for 2006 was 381.5 million tons.
Baosteel's IPO 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.
Further Information
Get more info on 'Shanghai Baosteel Group Corporation'.
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