Baosteel Expands SE Asia Footprint 宝钢拓展东南亚市场

By newsdoug on June 23, 2011

Baosteel forges Malaysia ties Just three months after taking one of its first baby footsteps outside its protected home market, Baoshan Iron & Steel (Shanghai: 600019), China’s second biggest steelmaker, is looking to expand its Southeast Asia footprint by buying into Amsteel Mills, a unit of Malaysia’s Lion Group. (English article) Details are still being hammered out, but this looks like a very mid-sized investment for the sector, with Baosteel set to put in around $1 billion. This deal would follow a March report that Baosteel was preparing to invest in a Vietnamese beverage can-making plant, which, even though no details were disclosed, I suspect involved a similar amount. (previous post) These are exactly the kinds of investments that Baosteel should be making — manageable in size and in friendly markets that are close enough to its home base for it to take a relatively active management role. Furthermore, by working with a partner, Baosteel avoids some of the perils of trying to manage by itself in an unfamiliar market, though having local partners can also have its drawbacks if the two sides disagree on their venture’s development. This kind of a strategy is far superior to that of domestic metals peer Nanshan Aluminum (Shanghai: 600219), which last month announced a plan to build an aluminum extrusion plant on its own in the US, with an initial investment of $160 million. (previous post) I said at the time that Nanshan’s plan was destined to run into big problems and probably fail in the end for a wide range of reasons. In contrast, I really like Baosteel’s latest move, and would expect to see more such investments in developing markets in the next two years.

Bottom line: Baosteel’s new move into Malaysia company is another smart step in its global expansion, representing a mid-sized investment with a strong local partner in a friendly market.

宝钢<600019.SS>不久前刚尝试进军海外，现在又计划收购马来西亚金狮集团旗下子公司Amsteel Mills股份，以拓展东南亚市场。收购细节仍在洽谈中，但宝钢准备对此项目投入大约10亿美元，这看似是一项中等规模的投资。3月有报导称，宝钢计划在越南投资一家饮料罐工厂，尽管细节并未披露，但我估计投资金额与这次不相上下。这恰恰是宝钢应当进行的投资——规模可控，市场友好，位置临近其本土基地，从而能进行相对积极的管理。此外，通过合作方式，宝钢能避免在不熟悉的市场进行完全自主管理的风险。当然，与当地企业合作也存在弊端，双方可能会对合资企业发展策略意见相左。不过总体而言，这种战略远比南山铝业<600219.SS>高明，後者上月宣布，计划在美国自主修建一座铝型材加工厂，初期投资金额为1.6亿美元。我当时说过，南山铝业的计划注定会出现重大问题，很可能会由於一系列原因而以失败告终。相反，我很欣赏宝钢的最新举措，而且预计未来两年中国企业在发展中市场会有更多类似投资。

一句话：宝钢计划收购马来西亚公司股份，是其全球扩张进程中的又一明智之举——即在友好的市场与当地强势的公司合作，进行中等规模的投资。