Risk Management Research For Shougan's Ferroniobium Investment Project In Brazil

With the deepening of reform and open-up,the continuous development of domestic economy,the integration of domestic market and overseas market,and the economic globalization,more and more enterprises look to overseas markets,investment and acquisition of projects abroad,especially for the resource projects.However,investment and acquisition abroad is a large and complex cause with many uncertainties,which is affected by many risks in all aspects.In September,2011,Shougang and the Chinese Consortium established a joint venture,purchasing 15%of the shares from the Brazil target company,ie.Shougan's Ferroniobium Investment Project in Brazil.(Hereafter called SFIPB)Compared with the common projects,there are more complex risk factors in the transnational project,such as the market issues,the legislation and regulations,and the economic condition etc.Hence,it is necessary to make an all-around risk analysis of a complex project systemically and scientifically to avoid the cost of risks.This essay starts with engineering project risk management theory,and then consults a large number of domestic and foreign relevant literature as well as the actual project circumstances.According to the management system of risk identification,risk assessment and risk response,and combining with the particularity of overseas engineering projects,it sums up five main risks in the SFIPB projects management process,including operation risk,market risk,foreign exchange risk,policy risk and the minority shareholder control right risk.Based on the comprehensive analysis on current risk evaluation methods,it adopted the analytic hierarchy process(AHP)to evaluate all the risks in engineering projects of SFIPB so that various type of risks are ranked in the order of importance,from which the three key risks viz.operation risk,foreign exchange risk and market risk are determined with high priority in risk control.Finally,a series of measures to deal with risks in the engineering project are put forward,producing a kind of relatively comprehensive and scientific systemic methods of risk management in international share acquisition projects,and providing precautions and lessons for the risk control in the similar projects in future.