Integrating China's Cement Industry by Learning from Morgan's Model

1. Establish the National Cement Industry Holding Group (the parent company of American Steel in the same year), which is jointly initiated by the leading industrial capital, banks, securities dealers and industrial funds to replace the decentralized single-handed struggle. The platform is positioned to co-ordinate industry-wide mergers and acquisitions, capacity scheduling, resource allocation and price coordination, and become the only top-level center of the industry. Specific implementation actions:

1. Collect social capital, insurance funds and long-term bank credit to create a 100-billion-level capital pool to meet the needs of large-scale mergers and acquisitions;

2. Integrate the capital market, coordinate IPO, refinancing and bond issuance, and focus on reducing the comprehensive financing costs of the whole industry;

The picture has nothing

to do with this article. Stage 1: Batch incorporation of small and medium-sized production capacity (rapid sweeping, low-cost expansion)

At present, there are still thousands of small and medium-sized cement plants, grinding stations and aggregate plants in China. The first goal of integration:

(1) Following Morgan's model of uniting 265 small and medium-sized steel plants, the small and medium-sized enterprises in the region are purchased and entrusted in batches according to provinces/prefectures and cities;

(2) The acquisition methods are flexible: cash acquisition, equity trusteeship, entrusted operation, capacity equity, and rapid acquisition of regional stock capacity;

(3) Target effect: more than 90% of retail investors will be eliminated in the short term, and the source of the underlying price war will be eliminated, which is consistent with the logic of Morgan's elimination of small and medium-sized steel mills in that year.

2. Stage 2: The alliance binds the leading enterprises (strong alliance, forming the main body of the industry)

(1) After the completion of the integration of small and medium-sized production capacity, Promote the deep binding of leading enterprises such as Conch, CNBM, Huaxin, BBMG Jidong and Red Lion;

(2) refer to the idea of Morgan's merger with Carnegie Steel to promote the merger of leading enterprises by stock exchange, cross-shareholding and joint establishment of new entities;

(3) Within five years, the original brand and operation team will not be split, the regional advantages, management capabilities and market channels of the leading companies will be retained, and the equity will be unified only at the top level;

(4) Eventually, a few giant industrial entities will be formed to undertake the national core production capacity and reproduce the pattern of "the only core group in the steel industry" in the United States.

3. Stage 3: Completion of global integration (filling regional gaps)

(1) For scattered production capacity and small supporting enterprises at the border of provinces and remote counties, mergers and acquisitions will be completed by the top-level platform, so as to achieve no dead ends in the layout of production capacity.

III.

(1) Unified capacity planning: the platform coordinates the whole country IV.1

, Upstream: monopolizing core raw material resources

(1) Centralized acquisition and long-term locking of high-quality limestone mines, unified control of mining rights, mining rhythm and raw material prices;

(2) Supporting and integrating the supply chain of auxiliary raw materials such as coal, gypsum and mixed materials, and bulk purchasing to reduce procurement costs;

(3) Effect: cut off the risk of raw material cost fluctuation from the source and form a raw material barrier, which is consistent with Morgan's logic of controlling iron ore and coal mine.

2. Midstream: Intensive management

at the production end (1) Unified scheduling of clinker production capacity in the region, centralized production of clinker in large bases, and only grinding and distribution in small and medium-sized stations to play a scale effect;

(2) Share production lines, maintenance teams and technical systems, eliminate inefficient equipment, and reduce production energy consumption, labor, operation and maintenance costs as a whole.

3. Downstream + logistics: Integration

of channels and transportation (1) Integrate regional distributors and terminal channels, unify the sales system, and reduce intermediate price increases;

(2) Self-built/merger and acquisition of dedicated fleets, inland river terminals and special railway lines to build an exclusive logistics network, cement logistics costs account for a high proportion, and there is a great space for cost reduction after integration;