Steel manufacturing is one of China’s most fragmented and complex sectors. The industry has also faced many challenges over the years. To resolve the problems, the Chinese government has initiated various consolidation measures. One of them surfaced in 2010 after the state-owned Shandong Iron and Steel Group (SISG) aggressively purchased the Rizhao Steel Company. At that time, Rizhao was one of China’s largest privately owned steel manufacturing firms. On the other hand, Shandong Steel was among the biggest state-owned steel-producing firms with massive annual productions.
Rizhao Chairman Du Shuanghua built the company from scratch to where it was at the time of sale. Du founded Rizhao Steel in 2003. The process began with constructing the massive steel manufacturing plant in the Coastal City of Rizhao. It took only 181 days to fully complete the construction project, making Du Shuanghua very impressed. Since its inception, Rizhao Steel has experienced consistent growth, as various annual output reports reveal. Continue reading this article https://techbullion.com/an-introduction-to-du-shuanghua-chairman-of-rizhao-steel/
The Sale of Rizhao Steel to SISG
Two main factors fueled the sale of Rizhao Steel to Shandong. The first was the problems that made survival in the steel sector difficult. For instance, the key players like Rizhao lacked the state’s financial support, which they needed so much for sustainability. This left Du Shuanghua without other choices besides selling his company to SISG. The other driving force was the Chinese government’s commitment to consolidate the industry.
Merging the two steel giants, Rizhao and Shandong, happened in two phases. The first took place in 2009 when Du Shuanghua sold a 67% stake of his firm to SISG. A few months later, he sold the remaining 33% of the Rizhao stake to Shandong in 2010 after failing to prevent the process. Although he had lost his company, Du still made a considerable profit from the deal. The merger saw the company name change from Rizhao Steel to Rizhao Iron and Steel Group (RISG).
