Shen Wenrong, founder of China’s largest non-state owned steel maker, Jiangsu Shagang Group, passed away on Sunday at the age of 78, according to a company statement.
The mogul died due to an unspecified illness, the company wrote. Shen stepped down as chairman in 2016 and his son Shen Bin took over the reins.
Shen, who according to Forbes estimates has amassed wealth of $3.7 billion based mostly on a company stake, turned a small steel workshop in his hometown of Zhangjiagang into Shagang Group. Last year, the group ranked fourth in China in terms of crude steel production after state-owned steel makers China Baowu Group, Ansteel Group and HBIS Group, according to the Brussels-based World Steel Association.
Born in a village, Shen’s first job was in a local cotton factory, according to Chinese media reports.
That factory branched out into steel processing and Shen was promoted to lead it. As China opened up its economy in 1978, business grew rapidly. In 2002, Shen decided to spend 220 million yuan ($29 million) to acquire a Dortmund-based steel mill from Germany’s industrial manufacturing firm Thyssenkrupp. He famously ordered the mill to be completely dismantled and all its parts shipped to China for reassembly.
Other acquisitions Shen made over the years include Yongxing Special Steel and Dongbei Special Steel. Outside steel, Shagang Group’s businesses include banking, logistics and property development, according to its website.
Yet the company’s acquisitions haven’t always run smooth. It is trying to offload a stake in London-based data center operator Global Switch, after becoming the largest shareholder in 2019. It acquired a 24% stake for £1.8 billion ($2.2 billion) from British billionaires David and Simon Reuben.
In recent years, many Chinese companies have been forced to unwind overseas acquisitions as authorities crack down on debt. Companies like Shagang and Fosun made such acquisitions to diversify their revenue streams.
Last year, Shagang sued Fosun over what it alleged was a failure to perform a financial obligation in a separate 13.6 billion yuan deal.
Fosun had planned to offload a stake in steel maker Nanjing Nangang to Shagang, but terminated that deal to sell it to state-owned financial conglomerate CITIC for the same price. Shagang dropped its lawsuit last October after receiving an unspecified amount of compensation, according to a stock exchange filing by Hong Kong-listed Fosun International.
The entire Shagang Group is still in need of new growth engines. As China’s economic growth slows and its property crisis drags on, steel prices aren’t holding up. In 2023, its Shenzhen-listed unit Jiangsu Shagang Co. saw its annual sales drop 15.5% year-on-year to 15.4 billion yuan, while profit more than halved to 193.4 million yuan, according to its annual report.
