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WISCO's $5billion Brazilian plant was stranded, and the steel enterprise went to sea and encountered a reef

WISCO's $5billion Brazilian plant was stranded, and the steel enterprise went to sea and encountered a reef

China Construction machinery information

Guide: WISCO temporarily shelved the $5billion Brazilian plant construction plan. Yesterday (November 12), the media quoted Deng Qilin, general manager of WISCO group, as saying that WISCO had temporarily shelved the Brazilian joint venture steel plant project for the sake of railways, ports, markets and other considerations. In this regard, Sun Jin, director of the Foreign Publicity Office of WISCO group, told

WISCO temporarily put aside the plan to effectively improve the effectiveness of its quality management system and process and set up a US $5billion plant in Brazil

yesterday (November 12), some media quoted Deng Qilin, general manager of WISCO group, as saying that WISCO had temporarily shelved the Brazilian joint venture steel plant project due to various considerations such as railways, ports and markets

in this regard, Sun Jin, director of the Publicity Office of WISCO group, explained to the daily economy that it was only a temporary grounding, not a cancellation. "Because we are facing many difficulties, this is an investment plan, which does not mean that the investment has passed."

in fact, except WISCO, Baosteel and Angang, other steel enterprises have plans to "go to sea". However, although the vision of saving freight and solving iron ore is beautiful, the road is not smooth

the plan was shelved due to immature conditions

the iron and steel industry has encountered extreme cold this year. In the first three quarters, the overall loss of the steel industry exceeded 3.1 billion yuan. Among the 34 steel enterprises, 14 suffered losses and 20 made meager profits. Such a dilemma made steel tycoons such as WISCO start to re-examine their overseas investment strategies

recently, Deng Qilin said in an interview that the Brazilian joint venture steel plant project has been suspended. He explained that the project needs the cooperation of railway, port, market and other factors, but now it seems that many conditions are not available

it is understood that the project is jointly developed by WISCO and Brazil mining ebx group. In November, 2009, WISCO invested 400million yuan and became the second largest shareholder of MMX, a subsidiary of ExB group in Brazil. At the same time, the two sides reached an agreement to build a steel plant in the ASU Industrial Park in Rio de Janeiro, Brazil, and conduct a preliminary feasibility study as required

at that time, some analysts believed that this US $5billion plant construction plan "is expected to become the largest investment in Brazil in China's history, such as seamless steel pipe, stainless steel plate and stainless steel strip with low frequency of relative activities". However, it is not easy to advance the plan

in July this year, it was reported that WISCO had abandoned its plan because the feasibility study found that the logistics cost of building a plant in Brazil was too high. It is said that the reason for WISCO to abandon this plan is the need to build a railway with a length of about 300 kilometers, which will lead to a sharp rise in the cost of building the plant

however, WISCO denied this at that time, saying that the project was still under feasibility study and investigation. After a lapse of four months, the rumor that the graphite product revenue was 39.3133 million yuan "the project of building a factory in Brazil was put on hold" reappeared. "Now we pause and don't consider it for the time being (Brazilian steel plant). We didn't say no or no, and the market conditions are not available, so we don't consider it now." Deng Qilin responded in an interview with the media

Sun Jin also told the daily economy: "they (Brazil) still have many problems with railways and ports."

the road for steel enterprises to "go to sea" is bumpy

just a year ago, the Ministry of industry and information technology issued the "12th Five Year Plan" for the development of the iron and steel industry (hereinafter referred to as the plan), which believes that China's iron and steel industry should take "investing in the construction of iron and steel plants abroad" as a major strategy for China's iron and steel industry to implement the "going out" strategy

some analysts believe that "Chinese steel enterprises have some advantages in building factories overseas. Because at present, domestic steel production capacity exceeds demand, and tens of millions of tons of steel are exported every year. Most of these exported steel are processed from imported high-priced iron ore and then transported abroad. If they build factories overseas, they will save a lot of freight."

it seems that steel enterprises have broad prospects for "going to sea", but like WISCO, many steel enterprises "go to sea" are "accompanied by wind and rain". For example, Baosteel's "going global" path can be described as twists and turns. As early as 2004, Baosteel began to talk with vale about the joint venture plant, and announced the official launch of the project in February of the same year, with a total budget investment of about US $1.5 billion. At that time, Baosteel said that this would be China's largest overseas direct investment project so far

however, things are not as good as planned. According to media reports, at that time, Brazil not only rejected Baosteel's request to hold a joint venture, but also proposed that if the sales of steel products in the Brazilian market were saturated, the excess products should be sold by Baosteel to Asia. Baosteel could not accept it, and the project was shelved

three years later, the two sides shook hands again for some reason, but at that time, the Brazilian environmental protection agency was worried about the local soil erosion and air pollution caused by the project, and did not approve the environmental protection license of the project. Baosteel withdrew from its cooperation with vale again. However, in March last year, new news came out: vale improved the project and the project obtained environmental protection permission...

the uneven roads are not only Baosteel and WISCO

according to media reports, the cooperation between Anshan Iron and Steel Co., Ltd. and American Steel Development Corporation has also been hampered by many obstacles from the 50 members of the U.S. congressman group for the steel industry

facing this situation, Wang Jianhua, chief editor of information and steel research expert of Shanghai Steel Union e-commerce Co., Ltd., believes that the current overall situation of the steel industry is not good, and few domestic enterprises have the ability to build factories overseas. "To invest overseas, (steel) enterprises must have a steady stream of funds."

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