The relocation of steel mills has become a fad in some areas. Seeing from the several enterprises that have been relocated, there is neither relocation of production equipment nor relocation of factory buildings. In fact, it is to demolish a steel plant and build a new steel plant. It is worth warning that the new steel mills built in the name of relocation do not sufficient proportion of their own funds and can only be supported by excessive loans. Thus, they will suffer high asset-liability ratio and heavy financial cost burden. Often when the new steel plant goes into operation, it will suffer losses. Except for a few steel mills relocated under the support of policies and other conditions, some of the other steel mills relocated have become “zombie enterprises”, some have been bankrupt and reorganized, some have been allocated free of charge, and almost no one has escaped from the predicament.
According to incomplete statistics, there are 19 steel mills located in provincial capitals and municipalities directly under the Central Government and 19 steel mills located in cities with a population of more than one million, totaling 38 (including enterprises that have been relocated in recent years).
From the connotation of steel plant relocation, in fact, demolishing a steel plant and building a new steel plant around it is not a real relocation. Therefore, it is not appropriate to tie "demolition" and "new construction" together for decision-making. The reasons are as follows.
Firstly, after the dismantlement of steel process equipment (such as smelting furnaces, kilns, etc.) and factories, bases, public and auxiliary facilities, there is a pile of waste that can no longer be used effectively. In addition, the manufacturing capacity of metallurgical equipment in China is far from comparable to that of the time when foreign second-hand equipment was purchased. Therefore, relocated enterprises do not use the old equipment dismantled, but build a new steel plant.
Secondly, under the general trend of steel overcapacity and slowdown of steel consumption, the decision-making basis of "demolishing steel mill" and "building new steel mill" is quite different: demolishing the original steel mill mainly depends on the total capacity of urban environment, the development space of enterprises and the opportunity cost of the land occupied, without considering whether closing the steel mill will result in a steel supply gap after demolition; To build a new steel plant around or in other places, we should consider not only the market demand, but also the adequacy of our own capital, the excessive financial burden, competitiveness and profitability.
Thirdly, in recent years, the central government has emphasized the protection of property rights, but how to calculate and compensate the loss caused by relocation has not yet been rationally and legally implemented. In practice, relocated enterprises have not been fully compensated, and some have not been compensated at all.
(To contact the reporter on this story: leo.ji@steelhome.cn or 86-555-2238932) |
