Analysis On TISCO Integrating Medium-sized And Small Iron & Steel Enterprises In Shanxi Province

Seeing from the present situation of the development of Chinese iron& steel industry, we contend that by promoting the annexation and reorganization of iron & steel enterprises and increasing industrial centralization,we can solve a lot of problems during the present development period.At first, by promoting the annexation and reorganization of iron & steel enterprises and setting up mega enterprise groups,the allocation of resources can be optimized in a large scale,specialized division of labor can be achieved to a deeper extent, which is favorable to the optimization & adjustment of iron & steel product structure and the improvement of the technological content & added value.Secondly, by setting up mega enterprise groups and achieving unified management of asset, capital,talent, equipment, technology and development & research, it is favorable that the whole administration level of group can be improved,that the upgrading and modernization of equipments of the whole group can be achieved, and that elimination of the backward & low-level capacity and optimization & upgrading of the whole industry can be propelled.Inside the mega enterprise groups,by achieving unified coordination and planning & development, we can avoid the low-level and repetitive construction, and prevent the rebounding of fixed asset investment around the whole industry. Thirdly, setting up Chinese world-class mega enterprise groups,we can improve the competitive power in the internal and external markets,broaden the market share,and improve the economic benefits of group.Finally, from the whole industry, by promoting the annexation and reorganization of iron & steel enterprises and setting up world-class mega enterprise groups,we can improve the quality & benefit of Chinese iron & steel development, promote the energy-saving and environment-protection, and change the development method.At present, there are 214 iron & steel enterprises in Shanxi Province, which can form the capacity of 63 million tons pig iron,40 million tons crude steel and 24 million tons steel products.The output of pig iron and crude steel are both ranked fifth in China. However, except TISCO, other iron & steel enterprises are all small in scale, disperse in location, low in industrial centralization,and uneven in equipment level.What is worse,among these enterprises,backward capacity and raw products take bigger proportion and most enterprises are in terrible position in regards of energy consumption and environment pollution.Especially, in the second half of 2008,impacted by international financial crisis,the demand of metallurgical market were depressed,and the price decreased sharply, so these enterprises found great difficulties in operation,some small companies even closed down completely or partly. The whole industry faced great challenges and pressures.Recently, the government introduced the revival programming of iron and steel industry, which provided the policy support and develop opportunity for metallurgical industry regulation and development of Shanxi province.Meanwhile, the binding enforcement of resource environment and the upgrading of market competition provide favorable conditions for Shanxi metallurgical industry in eliminating the backward capacity, regulating the structure,and optimizing the distribution.Shanxi province is rich in mine, coke, dolomite and iron ore, which is suitable for iron & steel industry development because of these resources.TISCO,the most influential iron & steel enterprises in Shanxi,possesses the competitive advantages of the biggest capacity in the world, the highest level of equipment and the most complete specifications.In recent years,in order to get rid of the limitation of resources and urban development,Risk Reduction of single product, TISCO,with great desire of annexation and reorganization,has the intension of moving towards regions with good resource conditions and low environment pressure level.When integrating iron & steel enterprises inside Shanxi province, TISCO can play the guiding role of giant group,optimize the industrial layout, and make full use of human resources, material resources and technical renovation resources.What is more, by strengthening development & research and introduction, TISCO can achieve scalable and intensive operation,and regulate product structure according to area characteristic, which can make products of TISCO become more distinctive and improve the quality & competitive power of steel products.Therefore,because the method of annexation and reorganization can be suitable for the development trend of the world iron & steel industry and suitable for the requirements of national policy, we can say that it is the best choice for the general optimization and upgrading of Shanxi iron & steel industry.The driving forces for the annexation and reorganization of Shanxi iron & steel industry are simple,and reasons are also substantial,but the future major work shall be designing annexation and reorganization model and constructing the group governance system through the analysis of internal and external environments.The thesis analyses the importance,necessity and feasibility of "TISCO integrating small and medium-sized enterprises in Shanxi province, forming six iron & steel industrial bases,then constructing giant group with international competitive power",and gives specific suggestions on the future execution paths and the construction of the future governance system.