Life with clients - Maintaining a strong foundation - Annual Review 2008

Maintaining a strong foundation

As China’s steel industry consolidates, Baosteel—a Fortune Global 500 company—is poised for rapid and healthy growth. As growth accelerates, strong internal controls and risk management procedures are an imperative.

Despite recent consolidations, the steel industry remains less concentrated than many industries, particularly in China. Although it accounts for one-third of the world’s steel market, China’s steel industry is highly fragmented, and many steel companies will need to overcome increasing competitive challenges in the global marketplace.

“Global growth is important, but innovation is how you can differentiate yourself,” says He Wenbo, General Manager of Baosteel Group, “and Deloitte China shares our passion for innovation. The team possesses outstanding knowledge of the steel industry and impressive qualifications on risk management services, and provided Baosteel with high-quality professional services.”

Deloitte China has reviewed internal controls across the company’s major business units to identify strengths and recommend improvements. It is also assisting management in establishing new risk management policies and procedures, including the development of a risk database.

“Baosteel is one of the first state-owned entities to implement controls and risk management processes of this caliber,” says John Hung, leader of Deloitte China’s manufacturing industry sector group. “Its success will serve as a model for similar projects with other state-owned entities.”