1, customer risk:
1) Shanxi Zhongyu's production efficiency is always at a low level, with uncompetitive production costs and high operational risks. According to public information, Shanxi Zhongyu produces 3 million tons of crude steel annually. However, due to major problems in the examination and approval of production procedures, the quality and supporting capacity of production equipment, daily capital turnover and equipment maintenance, the production capacity has never been fully released. According to public information, the production capacity of Shanxi Zhongyuyue crude steel is about 20 tons, but the actual output is only 10 ton/month. The comprehensive cost competitiveness of products is weak and the operational risk is high.
2) The steel market is cyclical, and the legal defects of Shanxi Zhongyu increase its business risks. Since August, 2008, the steel price in China has plummeted, and the steel price has dropped by more than 50% within 12 months, which has obviously intensified the competitive pressure of steel production enterprises and greatly increased the operating pressure, which has had an impact on Shanxi Zhongyu's profitability and flow capacity. At the same time, due to the defects in production procedures, a large number of wire products sold to Chongqing and other places were sealed up, which further aggravated the capital turnover dilemma of Shanxi Zhongyu. In order to maintain the normal production and operation of Zhongyu, sinosteel has continuously increased its financial support, the scale of capital occupation has continued to climb, and the accumulation of capital risks has accelerated.
2. As far as its own risk control ability is concerned:
1) customers are too concentrated and the financing scale is too large. In 2007, the advance payment to Shanxi Zhongyu was 3.426 billion yuan, accounting for about 13% of the total advance payment in the same period. According to the simple calculation of the liquidity demand of iron and steel production enterprises, the monthly liquidity demand of Shanxi Zhongyu's existing production capacity is only 7 ~ 65.438+0 billion yuan. Under the great temptation of the sharp rise in steel prices, sinosteel adopted a very radical investment strategy, and the scale of one-time capital expenditure on Shanxi Zhongyu reached 2 billion yuan, twice that of Shanxi Zhongyu's working capital, far exceeding the needs of daily operation. It also caused it to lose its favorable negotiating position and bargaining power in the follow-up cooperation with Shanxi Zhongyu, and fell into a passive situation.
2) Lack of supervision over the daily production of Shanxi Zhongyu. Due to the lack of steel production experience and supporting warehousing and logistics supervision and information monitoring means, sinosteel's ability to supervise the daily production and operation of Shanxi Zhongyu was limited, and it failed to find its abnormal operation in time, which eventually led to the subsequent risk out of control.
3. Internal management risks:
The imbalance of internal management leads to the management risk of supply chain service mode being further out of control. Since Shanxi Zhongyu's large capital occupation incident broke out in 2008, sinosteel's management failed to restructure its debts and make impairment provision in time. In order not to affect the listing progress of Sinosteel, the management of Sinosteel reorganized and managed the shares of Shanxi Zhongyu in the name of Guofeng Trade. In addition to paying 65.438+0.8 billion yuan for stock purchase on behalf of Guofeng Trade, it also needs to pay 4 million yuan for custody every month. In addition, during the trusteeship period, sinosteel mobilized its subordinate trading companies and charging companies to continue to provide material support to Shanxi Zhongyu, resulting in a further increase in the scale of capital occupation. Affected by this, during the trusteeship period, the investment scale of Shanxi Zhongyu increased by 2 billion yuan, and the net output amounted to 3.8 billion yuan, which led to many risks in the final trend.