Overseas Investment Projects Of Z Alliance

Chinese steel industry is required to remove 100 to 150 million tons crude steel production capacity from 2016 to 2020.The excessive equipment making capacity,industrial funds and skilled labor need to be channeled into overseas markets.In 2017,the China Steel Industry International Cooperation Alliance(abbr.Z Alliance)is established.This thesis builds a customized Risk Analysis Framework for Z Alliance’s overseas investment projects,followed by an application in a due diligence investigation of a Mozambique Steel Project.Most of Z Alliance’s overseas investment target markets are developing countries along the one belt one road.This results in a constraint of lack of historical data of identical or similar investment projects.With this constraint,this thesis builds a customized risk analysis framework for Z Alliance instead of rigidly utilizing the computer aided valuation at risk method based on statistics theories.This customized risk analysis framework prioritizes risk identification meanwhile integrates risk assessment and mitigation all together.Step One Risk Identification is set to establish a comprehensive risk inventory.Risk check lists are compiled under eight WBS secondary risk factors,based on which different third party consultancies are employed to run field investigations.Step Two Risk Assessment adopts Delphi Method to score all risk factors in two dimensions –likelihood and consequence severity.A risk map is drawn to qualitatively show the general risk level.Step Three Risk Mitigation ensures every factor has its solution.The boundary of Z Alliance’s risk analysis framework is the risk map with solutions.The member enterprises in Z Alliance are expected to conduct further research in light of their own risk mitigation capability and risk preference.The hard constraint of lack of historical data is the root of the risk analysis framework customization for Chinese steel industry’s overseas investments.Risk identification of the framework is to be prioritized under this constraint.The Alliance and its members’ risk analysis work boundary is set at the point of the risk map with solutions.