
288 Metallurgical Process Engineering
plant, it is not always the bigger, the better. In an ultra-large-scale steel plant
with irrational process structure, the production would fall into disarray and
the general layout would be unfavourable. As a result, the excessively higher
investment, the higher transportation cost, the higher energy consumption, the
lower production efficiency and the lower capital return would happen.
The cost
of
steel products is composed
of
investment cost, production cost,
transportation and sales costs. Too long sales radius (weighted mean) would lower
the profit margin
of
unit product. Therefore, considering different steel products
and different regional conditions, the production scale
of
an individual steel plant
should falI into a rational range. Modern steel plants are folIowing the developing
trend
of
specialized production, regionalized sales and deep processing products.
However, market demands for steels are diversified, and the technical progress
leads to specialized production in a steel plant. Solution to this contradiction
should not be building omnipotent ultra-large-scale steel plant, as it would cause
problem like difficulties in raising funds and low capital return. Developing trend
should be forming regional steel corporation or even trans-national steel corpora-
tion or specialized steel corporation.
It
may be a merger
of
steel enterprises with
integrated financing operations; also be market-allocated, investment-divided
strategic alIiance
of
steel enterprises with partial dependent capitals and manage-
ments for each other. As for a steel plant which would be a link
of
an eco-
industrial band (zone) in the future, it may form a consolidated corporation with
enterprises
of
other sectors, such as power plant, cement plant, etc.
8.6.5 Issues about investment
To gain market competitiveness, steel plants need to rely on strategic invest-
ment for sustainable development. However, the investment strategy has to be
carefully arranged, as the steel industry is now an industry with low investment
return. In investing for a steel plant, considerations should be given how to im-
plement innovations in structure and mode by best using existing knowledge
and achievements. In Fig. 8.9, strategic investment issues like investment direc-
tion, investment order, investment strength, investment opportunity, capital
make
-up,
capital raising and risk assessment are shown from the perspective
of
multi-target thinking.
It
should be noted that steel plant restructuring is a process
of
technological
progress; it is also a process involving more and more investment decision-
making knowledge. Much creativity is also involved in the course
of
investment
decision-making. For instance, it has been pointed out in chapter I that the main
reason
of
Chinese steel industry, which had risen high emerged in the 1990s, is
that the application and integration
of
6 key/common technologies had smoothed
out the manufacturing processes in Chinese steel plants, particularly the processes