Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

Abstract

ArcelorMittal was the largest steel producer in the world having a production capacity of 120 million tons. It had a leading presence in Europe, America and even Africa. However, they did not have a strong hold on the Chinese steel industry, the biggest steel industry in the world. Hence they tried to enter the Chinese steel industry by acquiring a 43% stake in China Oriental Group, a small steel plant based in Wanchai, Hongkong. This kind of expansionary move was not new to ArcelorMittal as its predecessor Mittal Steel expanded its European steel empire in this way. However there were certain political risks involved in the step taken by ArcelorMittal. This was because China's steel sector was not very open to foreign intervention. This time also there had been several Chinese political leaders as well as Chinese steel producers talking against ArcelorMittal's move. China had several restrictions for foreign companies intervening in China's industries which would make this project an expensive one for ArcelorMittal. Moreover China's steel industry was extremely fragmented both production wise and geographically. Many a times this fragmentation was encouraged by local and provincial Chinese leaders since these companies were their source of tax income. Therefore consolidating China's fragmented steel industry was quite difficult. Given this situation it remained to be seen whether ArcelorMittal's entry into China could generate the expected results.
Location:
Industry:
Other setting(s):
2007

About

Abstract

ArcelorMittal was the largest steel producer in the world having a production capacity of 120 million tons. It had a leading presence in Europe, America and even Africa. However, they did not have a strong hold on the Chinese steel industry, the biggest steel industry in the world. Hence they tried to enter the Chinese steel industry by acquiring a 43% stake in China Oriental Group, a small steel plant based in Wanchai, Hongkong. This kind of expansionary move was not new to ArcelorMittal as its predecessor Mittal Steel expanded its European steel empire in this way. However there were certain political risks involved in the step taken by ArcelorMittal. This was because China's steel sector was not very open to foreign intervention. This time also there had been several Chinese political leaders as well as Chinese steel producers talking against ArcelorMittal's move. China had several restrictions for foreign companies intervening in China's industries which would make this project an expensive one for ArcelorMittal. Moreover China's steel industry was extremely fragmented both production wise and geographically. Many a times this fragmentation was encouraged by local and provincial Chinese leaders since these companies were their source of tax income. Therefore consolidating China's fragmented steel industry was quite difficult. Given this situation it remained to be seen whether ArcelorMittal's entry into China could generate the expected results.

Settings

Location:
Industry:
Other setting(s):
2007

Related