Baowu
China Baowu Steel Group Corp., Ltd., commonly known as Baowu, is a state-owned iron and steel company headquartered in the Baosteel Tower in Pudong, Shanghai, China. The company was formed by Baosteel Group absorbing its smaller state-owned peer, Wuhan Iron and Steel Corporation in 2016.
Baowu is the second largest steel producer in the world measured by crude steel output, with an annual output of around 35 million tons. 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.
According to World Steel Association, the corporation was ranked the 5th in 2015 the world ranking by production volume. A plan to merge with Wuhan Iron and Steel Corporation was announced on 21–22 September 2016, which would make the combined production volume the second highest in the world, after ArcelorMittal, surpassing Hesteel Group. 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 and July 2016, and a further cut for Baosteel Group of 2.10 million while a 3.15 million cut was already planned the final ranking may still significantly change.
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.
History
Baoshan Iron and Steel
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 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.
Baosteel Group
On November 17, 1998, the former Baoshan Iron and Steel Corporation absorbed the Shanghai Metallurgical Holding Group Corporation and the "Shanghai Meishan Group" 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.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. 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.
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 .
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.
Baowu
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, 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. It is now the second largest steel producer in the world, with assets estimated to be worth around 730 billion Yuan, employing 228,000 employees and expected annual sales revenues of 330 billion Yuan.In 2019, China Baowu Steel Group acquired 51% stake of Masteel Group from the SASAC of for free. The acquisition also included the indirect controlling stake of the list company Maanshan Iron and Steel Company Limited.
See since 2006.
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". The International Trade Commission 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.Subsidiaries
- Steel plants
- * Baoshan Iron and Steel
- ** Shanghai Meishan Iron and Steel
- ** Wuhan Iron and Steel Company
- ** Zhanjiang Iron and Steel
- * Shanghai First Iron and Steel Co., Ltd.
- * Shanghai Second Iron and Steel Co., Ltd.
- * Shanghai Pudong Iron and Steel Co., Ltd.
- * Shanghai Fifth Iron and Steel Co., Ltd.
- * Guangdong Shaoguan Iron and Steel
- ** SGIS Songshan Co., Ltd.
- * Wuhan Iron and Steel Corporation
- ** Guangxi Iron and Steel Group
- * Xinjiang Ba Yi Iron and Steel Group
- ** Xinjiang Ba Yi Iron and Steel
- Mining conglomerate
- * Shanghai Meishan Co., Ltd.
- Financial companies
- * Hwabao Investment
- * Fortune Investment
- Others
- * Guangdong Iron and Steel Group
Equity investments
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, as well as China Bohai Bank for 11.67% stake, China Pacific Insurance for 14.17% stake.