Hyundai Steel Refining Project Risk Management

With the deepening and development of economic globalization, the economic exchange between nations is increasingly frequent and the internationalized transnational trade is booming. Fierce competition and tough situation impel many countries to go abroad, expand foreign markets, and explore development roads of internationalization. Therefore, international project contract has become an indispensible part of international trade. Due to the rapid development of Chinese iron and steel industry in the past few years, which led to an excess capacity in iron and steel industry, namely, the supply exceeded the demand. As a consequence, the country introduced the iron and steel production limitation policy, raised the standard of environmental protection, and interfered and tightened bank credit for iron and steel industry. After that, the new metallurgy project decreased sharply and domestic metallurgy market shrank for some time. To seek for greater living and development space, Company implemented timely strategic transformation to enter foreign project markets.Based on the studies of risk management theory and project management theory and with the combination of project characteristics and life cycle, this paper studies our company’s Hyundai Steel Refining Project in terms of its characteristics, such as multi-national participation, great technical breakthrough, high quality standard requirement, and distinct domestic and foreign technical code criteria, to identify the risk factors, evaluate project risk degree by means of specialist grading, and obtain risk factors and their influencing degree through qualitative analysis and quantitative analysis. In addition, it gives a detailed analysis and evaluation for various predictable risk factors of Hyundai Steel Refining Project, grades the influences every risk factor may cause, and draw up measures and apply them in the whole process of project management, thus providing basis for the response of project risk and proposing some constructive risk precaution measures to realize reasonable resource allocation, reduce operation risks and potential hazards of the project. These methods are helpful for reducing the risk damage as much as possible, saving the cost, increasing the profit, and improving the anti-risk capacity of our company in international contract.Eventually, practice of project risk management, through research and demonstration, we draw up the risk management system for Company. Aiming at the handling system of project risk factor and the planning system of project risk management, it fills in a gap of company in project risk management, especially international one, accumulating experiences in international project contract for enterprises and enhancing their international competitive capacity.