Case | HBS Case Collection | December 2011 (Revised May 2012)

Heavy Metal (A): Baosteel Enters Brazil

Abstract

What is Baosteel, a top Chinese steelmaker, doing in Brazil? The company is responding to the Chinese government's "go global" policy and to the possible rise in iron ore input costs. But steel mills are complex, capital-intensive projects, and Brazil is an emerging market that poses manifold risks to foreign investors. Vale do Rio Doce, Baosteel's prospective partner, is an iron miner with little experience in steelmaking. Baosteel must evaluate whether it is choosing the right company, and site for its first overseas greenfield investment.

Keywords: global business; foreign direct investment; China; developing countries; Latin America; industrial development; strategy and execution; analysis; industrial analysis; heavy industry; country analysis; Brazil; economic analysis; natural resources; infrastructure; planning; capacity planning; contingency planning; demand planning; competition; core competencies; corporate strategy; strategic positioning; five forces; bargaining power of suppliers; Globalization; Government and Politics; Policy; Emerging Markets; Foreign Direct Investment; Mining; Steel Industry; Mining Industry; China; Brazil;

Citation:

Abrami, Regina M., and Iacob Koch-Weser. "Heavy Metal (A): Baosteel Enters Brazil." Harvard Business School Case 912-411, December 2011. (Revised May 2012.)