Nigel's plans scuppered? British Steel

I think China’s a large part of their price advantage comes from their buying power.
I'm not sure this is entirely the case, although it's certainly a very important factor.

I've worked on deals in China with a lot of the large SOE's, particularly on the energy side. The really, really weird thing with SOEs is that they aren't mono-culture.....and by that I mean that a steel manufacturing SOE will also own other, substantial and totally unrelated businesses. One large energy SOE we did a deal with also owned most of the Bank of Beijing, and IT research company, a hotel company etc etc. It's quite weird. From what I've seen, the profitable businesses fund the less profitable to ensure that the "5-year plan objectives" are met. It seems to work for them.
 

BuggerAll

LE
Kit Reviewer
Book Reviewer
I'm not sure this is entirely the case, although it's certainly a very important factor.

I've worked on deals in China with a lot of the large SOE's, particularly on the energy side. The really, really weird thing with SOEs is that they aren't mono-culture.....and by that I mean that a steel manufacturing SOE will also own other, substantial and totally unrelated businesses. One large energy SOE we did a deal with also owned most of the Bank of Beijing, and IT research company, a hotel company etc etc. It's quite weird. From what I've seen, the profitable businesses fund the less profitable to ensure that the "5-year plan objectives" are met. It seems to work for them.
...and South Korea.
 
I'm not sure this is entirely the case, although it's certainly a very important factor.

I've worked on deals in China with a lot of the large SOE's, particularly on the energy side. The really, really weird thing with SOEs is that they aren't mono-culture.....and by that I mean that a steel manufacturing SOE will also own other, substantial and totally unrelated businesses. One large energy SOE we did a deal with also owned most of the Bank of Beijing, and IT research company, a hotel company etc etc. It's quite weird. From what I've seen, the profitable businesses fund the less profitable to ensure that the "5-year plan objectives" are met. It seems to work for them.
Key line in that for me is the last one. The Chinese economy is structured around planning time frames that don’t exist in the Anglo-American shareholder value model.
 

FORMER_FYRDMAN

LE
Book Reviewer
The value ascribed isn't "notional", it's "nominal" in the parlance. The science is disupted in as much a manner as those who suggest smoking doesn't cause lung cancer.

I agree that for many industries, the effect is to drive industry offshore to lower cost jurisdictions. However, a good many of the energy intense industries also enjoy significant tariff protection.
But the solution to avoiding lung cancer caused by smoking is to stop smoking entirely, not to smoke in the garden instead of the house.

If you believe in MMGW, a carbon levy may make some sort of sense. To the rest of us, it's simply another greenwashing tax levied on western companies but not on the rest of the world - which seems a bit strange if you're honestly trying to solve a global problem related to atmospheric composition - which, of course, no-one actually is.
 
Let's hope a solution can be found ASAP.



Government bailout and Turkish takeover - aren't we doing well!

'The government has agreed to provide financial support to British Steel potentially worth hundreds of millions of pounds, paving the way for Turkey's military pension fund to secure the company's immediate future. Sky News has learnt that ministers at the Department for Business, Energy and Industrial Strategy (BEIS) have signed off on the package, which will encompass grants, possible indemnities, loans on commercial terms and other items.'

 

ches

LE
Tbh, the demise of BS was a long time coming & i'm surprised its lasted this long. My first dealings with them were at low level about 1990. Part of large scale building contracts I was involved with back then as a new starter in my game were speccing steel & lots of it. BS just couldn't compete with south korean stuff & thats barking. The bloody unions fecked themselves by not seeing the impact of foreign imports & aligning their demands from BS to suit. You can't expect to compete in International markets with that attitude. Its a harsh competitive world but thats how it is.

Later on, the quality of BS had dropped wrt to delivery & lead in times of orders. You couldn't get guaranteed delivery to site. So why bother, I'll go somewhere else that can........at that time it was Poland doing the biz & good on them.

We are still world leaders in the production of high grade steel, its a very niche market but very profitable for the companies that are in that game. BS isn't one of them.
 
Tbh, the demise of BS was a long time coming & i'm surprised its lasted this long. My first dealings with them were at low level about 1990. Part of large scale building contracts I was involved with back then as a new starter in my game were speccing steel & lots of it. BS just couldn't compete with south korean stuff & thats barking. The bloody unions fecked themselves by not seeing the impact of foreign imports & aligning their demands from BS to suit. You can't expect to compete in International markets with that attitude. Its a harsh competitive world but thats how it is.

Later on, the quality of BS had dropped wrt to delivery & lead in times of orders. You couldn't get guaranteed delivery to site. So why bother, I'll go somewhere else that can........at that time it was Poland doing the biz & good on them.

We are still world leaders in the production of high grade steel, its a very niche market but very profitable for the companies that are in that game. BS isn't one of them.
Not just a problem with BS. Unions have being pricing industries into extinction for decades. As long as the Union heads get their pensions, then all is OK. **** the common man, as far as those parasites are concerned.
 

ches

LE
Not just a problem with BS. Unions have being pricing industries into extinction for decades. As long as the Union heads get their pensions, then all is OK. **** the common man, as far as those parasites are concerned.
Totally agree. Bunch of self interest shite bags. People moan about corrupt politicians, I'd put union leaders & big wigs in the same basket.
 

BuggerAll

LE
Kit Reviewer
Book Reviewer
The preferred bidder for British Steel has been announced. It's the pension fund of the Turkish Army.


You couldn't make it up.
Not sure why you think it’s a problem. Inward investment. All good. What’s disappointing is that British investors are failing to invest in British business.
 
Not sure why you think it’s a problem. Inward investment. All good. What’s disappointing is that British investors are failing to invest in British business.
It also highlights the flawed nature of the UKs unfunded public sector pension schemes.

Pension funds are powerful institutional investors, particularly in to infrastructure projects and core industries. Think how powerful a funded NHS pension scheme could be....
 
It also highlights the flawed nature of the UKs unfunded public sector pension schemes.

Pension funds are powerful institutional investors, particularly in to infrastructure projects and core industries. Think how powerful a funded NHS pension scheme could be....
Indeed. It would almost certainly bankrupt the UK in short order.
 

BuggerAll

LE
Kit Reviewer
Book Reviewer
What's a Turkish pensioner going to do with 3 tonnes of hot rolled angle ?
No idea but they’re already the 3rd largest producer of steel in Turkey so I expect they have an idea.
 
Let's just get real shall we? Steel in the long term will likely not work in the UK. Countries like China/ Vietnam/ India will always be able to supply it for cheaper till even they get richer. It's a commodity, unless you're talking about high tensile steel or other specialized varieties, made in smaller quantities for specific applications.
 

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