Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/article/?id=308380&type=Business
Shougang scours Asia for mill
Created: 2007-3-9
Author:Helen Yuan and Anuchit Nguyen
SHOUGANG Corp, the parent of China's ninth-biggest steel maker, is studying sites in Southeast Asia to build a mill after scrapping a 100 billion baht (US$2.84 billion) project in Thailand following the military coup, Bloomberg News reported yesterday.
"We dropped the plan because we're concerned about the political situation in Thailand," the Beijing-based steel maker's Chairman Zhu Jimin said yesterday at the annual meeting of the Chinese legislature. He declined to name the countries being considered and didn't provide details.
Thailand's military seized control in September and installed a government that imposed currency controls and new foreign-ownership laws, shaking investor confidence.
China's drive to slow investment in the steel industry is spurring Shougang and rivals to study building mills elsewhere in Asia, where demand for buildings and roads is also surging.
"Shougang's plan indicates the Chinese mills are turning to expand overseas following an overcapacity in the domestic market," said Zhou Xizeng, chief analyst with Citic Securities Co in Beijing. "It's good news and will boost the share price."
Lou Chunlian, a resource researcher at Baosteel Group Corp, China's biggest steel maker, said: "Indonesia and Cambodia have iron ore resources and Vietnam is also a good place for Chinese steel makers to consider." Building mills in Southeast Asia "is mainly to tap local demand," he said.
Beijing Shougang Co, Shougang Corp's publicly traded unit, surged 7.9 percent to close at 5.33 yuan yesterday in Shenzhen. The stock earlier jumped as much as 10 percent, the daily limit, to an almost three-year high of 5.43 yuan. Shougang's Chairman Zhu said on Wednesday its listed unit plans to buy steel assets from the parent and make the group all publicly traded.
Ford Motor Co said in January it may scrap as much as US$1 billion of planned investment in Thai factories because of the currency and foreign-investment curbs. Thailand's economy grew at the slowest pace in almost two years last quarter.
"Shougang submitted their interest to the Board of Investment to build a steel plant in Thailand in the middle of 2005," the investment board's secretary general Satit Chanjavanakul said by telephone yesterday. "After that, the company didn't contact the board again. That was long before the political turmoil started in early 2006 or the military coup in September last year." The value of applications to build new factories and other facilities in Thailand fell 24 percent last year.
"We dropped the plan because we're concerned about the political situation in Thailand," the Beijing-based steel maker's Chairman Zhu Jimin said yesterday at the annual meeting of the Chinese legislature. He declined to name the countries being considered and didn't provide details.
Thailand's military seized control in September and installed a government that imposed currency controls and new foreign-ownership laws, shaking investor confidence.
China's drive to slow investment in the steel industry is spurring Shougang and rivals to study building mills elsewhere in Asia, where demand for buildings and roads is also surging.
"Shougang's plan indicates the Chinese mills are turning to expand overseas following an overcapacity in the domestic market," said Zhou Xizeng, chief analyst with Citic Securities Co in Beijing. "It's good news and will boost the share price."
Lou Chunlian, a resource researcher at Baosteel Group Corp, China's biggest steel maker, said: "Indonesia and Cambodia have iron ore resources and Vietnam is also a good place for Chinese steel makers to consider." Building mills in Southeast Asia "is mainly to tap local demand," he said.
Beijing Shougang Co, Shougang Corp's publicly traded unit, surged 7.9 percent to close at 5.33 yuan yesterday in Shenzhen. The stock earlier jumped as much as 10 percent, the daily limit, to an almost three-year high of 5.43 yuan. Shougang's Chairman Zhu said on Wednesday its listed unit plans to buy steel assets from the parent and make the group all publicly traded.
Ford Motor Co said in January it may scrap as much as US$1 billion of planned investment in Thai factories because of the currency and foreign-investment curbs. Thailand's economy grew at the slowest pace in almost two years last quarter.
"Shougang submitted their interest to the Board of Investment to build a steel plant in Thailand in the middle of 2005," the investment board's secretary general Satit Chanjavanakul said by telephone yesterday. "After that, the company didn't contact the board again. That was long before the political turmoil started in early 2006 or the military coup in September last year." The value of applications to build new factories and other facilities in Thailand fell 24 percent last year.
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