Steelmakers get ready to go global
By Yin Ping (China Daily)Updated: 2006-11-03 09:03
China is poised to play an important role in global merger and acquisition
activities in the steel sector, according to an international industry
consultant.
Nicholas J. Sowar, global steel leader with Deloitte &
Touche USA LLP, said in a recent interview in Shanghai that the ongoing internal
consolidation of China's steel sector was crucial to its
development.
Sowar applauded the Chinese Government's policy direction on
the steel sector, including reducing export value-added tax refunds, and its
iron ore import licence system.
"China's efforts to make its top 10
steelmakers dominate half of its total steel market by 2010 will speed up
internal consolidation," Sowar said.
As consolidation accelerates, Sowar
said he believed Chinese steelmakers would become stronger and more able to
acquire overseas competitors.
"The day will come soon, as top Chinese
steel mills are in the process of becoming buyers," he said.
Baosteel
Group, China's top steelmaker, will be a major player in steel acquisitions,
Sowar said.
With years of consulting experience in steel industry mergers
and acquisitions, Sowar said Baosteel should consider access to raw materials,
more markets and better R&D when making acquisitions.
According to a
Deloitte study, only 30 per cent of global merger and acquisition activities in
the steel sector succeeded, while the vast majority, 70 per cent,
failed.
Sowar praised the Mittal-Arcelor merger as an outstanding case,
with both sides benefiting from shared raw materials and supplementary
markets.
"The merger makes the new entity a truly global company," he
said.
| 1 | 2 |  |
(For more biz stories, please visit Industry Updates)