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Industry downturn, high cost steel industry is facing transformation dilemma

industry downturn, high cost steel industry is facing transformation dilemma

China Construction Machinery Information

Guide: although asset transfer was arranged as early as three months ago, Chen Zhiqiang, the boss of private steel enterprise in Fengrun District, Tangshan City, Hebei Province, who fled debt, still did not escape arrest. On August 6, Chen Zhiqiang was arrested at the Philippine airport. On August 9, the director of huanxizhuang township police station in Fengrun District confirmed the news to

although the asset transfer was arranged as early as three months ago, Chen Zhiqiang, the boss of a private steel enterprise in Fengrun District, Tangshan City, Hebei Province, who fled in debt, still did not escape being caught. On August 6, Chen Zhiqiang was caught at the Philippine airport. On August 9, the director of huanxizhuang township police station in Fengrun District confirmed the news to

many people in the iron and steel industry in Tangshan believe that the main reason for Chen Zhiqiang's broken capital chain is that he fell into high private usury loans, but it is also related to the rapid expansion of the company and the industry downturn. Due to the huge investment in fixed assets in the iron and steel industry and its scale effect, enterprises tend to expand production capacity. The cost of active transformation is high and the power is insufficient. If the industry continues to downturn, Yan Xi, chairman of Tangshan Baochun iron and steel, even predicted that the second and third chenzhiqiang will appear in Tangshan six months later

transfer assets three months ago

on August 9, the plant area of Baoqiang iron and Steel Co., Ltd. in huanxizhuang Industrial Park, Fengrun District, Tangshan was deserted and empty, and the doorman dozed behind the iron fence electric door. Two days ago, as soon as the news spread that Baoqiang's boss Chen Zhiqiang ran away in debt, the local creditors who came on hearing the news robbed all the valuable properties in the factory

"the police station has taken over here. Those who want debt go to the police station." The doorman said. He said that only a few police station policemen in the plant maintained on-site safety. "Two days ago, the debtors came to the factory to move things. Now there is nothing left in it." In the open factory area, a small truck carried more than ten steel gas cylinders, and the owner was registered under the supervision of the police. "That's all!"

at the junction of huanxizhuang Industrial Park in Fengrun District of Tangshan City and Tianjin, several small steel enterprises have been set up on both sides of a narrow rural road. Baoqiang steel was founded by Chen Zhiqiang on February 18th, 2004, with a registered capital of 5million yuan, and the legal representative is Chen Zhiqiang. Subsequently, Chen Zhiqiang set up five steel enterprises in Tangshan, Xinjiang and other places, including Xinjiang Wusu Zhaodong Casting Co., Ltd. and Xinjiang Jifeng Group Co., Ltd. This time, the capital chain was broken because the production and operation of Xinjiang company had problems first. "There was an accident in Xinjiang, which came to us two days ago." Huanxizhuang village local villagers said

the staff of the local township government also confirmed this statement, "people (chenzhiqiang) are from huanxizhuang, but things happen in Xinjiang." According to the director of huanxizhuang police station, the case has been transferred to Tangshan Public Security Bureau because of the huge amount involved. The current work of huanxizhuang police station is to maintain the scene. He confirmed that Chen Zhiqiang had been arrested. In the Economic Investigation Brigade of Fengrun District, Tangshan City, the staff specially responsible for receiving the informants of Baoqiang iron and steel case said that the amount involved in Chen Zhiqiang's case has exceeded hundreds of millions of yuan, and the case was filed for investigation by the Economic Investigation Brigade of Tangshan Public Security Bureau. The source revealed that at present, the amount reported by the informants is mostly 3 or 5 million yuan

for many creditors, Chen Zhiqiang's arrest is good news, but they will also face the fact that Chen's assets may be running out. Industrial and commercial data show that Chen Zhiqiang has begun to transfer assets before "running away". Three months ago, on May 2, Chen Zhiqiang transferred the equity of Baoqiang steel to Wang Chunli

so, is it the lack of funds that will transfer the enterprise to obtain funds, or has it been known that the capital chain is broken and measures are taken to preserve assets to the greatest extent? The public information cannot know the purpose of Chen Zhiqiang's transfer, but judging from the fact that Baoqiang steel plant was emptied by creditors, it is likely to be the latter. Because if it is the former, Wang Chunli, the current owner of Baoqiang iron and steel, should stand up and stop the behavior of creditors, and Wang Chunli did not do so

the financial data of Baoqiang steel also points to asset transfer or loss. At the beginning of 2011, the current assets of Baoqiang iron and steel company was 47.56 million yuan, but by the end of the year, the company's current asset balance was only 15.5961 million yuan

It is reported that Chen Zhiqiang involved hundreds of millions of private loans, almost all of which came from areas where the cover of the blood glucose meter can increase its service life by opening and closing back and forth after using wear-resistant materials. According to local villagers, a fund raiser surnamed Li near huanxizhuang raised 100 million yuan for Baoqiang steel. The money was "borrowed from relatives and friends at a certain interest, and then lent to Baoqiang steel at a higher interest."

this is not a case. An unnamed steel industry person in Tangshan said that it is a common phenomenon for private steel enterprises to raise funds from the private sector in Fengrun and Fengnan areas of Tangshan. In Fengrun District, this phenomenon of private lending is particularly prominent. "Almost all steel enterprises in Fengrun district are small and medium-sized enterprises, which are difficult to obtain funds from banks, and private lending has become the main financing channel." Tangshan Fengrun district is a gathering place of small private enterprises. It is found that on both sides of the first-class highway from Fengrun to Tianjin, there are steel enterprises ranging from family workshops to billions of yuan in income. Almost all the billboards you can see are steel companies. The source also revealed that the monthly interest rate of this kind of loan is generally 2.5%, and the monthly interest rate of 3 or 4 is also common, even as high as 5 or 6 points. This means that the borrower needs to return 30% to 60% of the principal a year

take Chen Zhiqiang as an example. After founding Baoqiang steel, in 2007 and 2008, Chen Zhiqiang saw that the steel business was hot in Xinjiang and other places, and even made money from Tangshan, so he decided to open a steel plant in Xinjiang. In just four or five years, Chen Zhiqiang opened five steel mills in Xinjiang. This requires a lot of money. During this period, it was the outbreak of the international financial crisis that China took tightening macro-control measures. With the maturity of technology, banks tightened credit. The credit of steel and real estate industries has become extremely difficult, causing these industries to turn to trust channels to obtain funds

according to the industrial and commercial annual inspection information, the sales revenue of Baoqiang iron and steel in 2011 was 122 million yuan, and the total profit was 2187400 yuan. By the end of 2011, the total assets of Baoqiang steel were 19.1255 million yuan and the shareholders' equity was 4.5943 million yuan. Obviously, according to the profitability of Baoqiang steel, it cannot support rapid expansion, and Chen Zhiqiang needs to obtain funds from other channels. Now it seems that private lending has become Chen Zhiqiang's main source of funds. It is reported that the monthly interest rate of Chen Zhiqiang's local loan is 2 points

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