China Metallurgical Group Corp (MCC), the nation's leading construction company, is making the final preparations for its initial public offering (IPO), including restructuring its board of directors.

"We are in the final phase for the IPO," said company President Yang Changheng.
As part of the preparation, MCC appointed five independent directors to its board of directors yesterday, a crucial move to strengthen its corporate governance.

"Our newly structured board of directors is an important step in making our company management more transparent and effective," said Yang.

Yang said the structure of the company's board of directors will emulate that of Singapore's state-owned Temasek Holdings.

Boards of directors of companies under Temasek generally consist of civil servants and entrepreneurs invited from the private sector.

Like MCC, more major State-owned enterprises will follow this model, said Shao Ning, vice-chairman of the State-owned Assets Supervision and Administration Commission (SASAC).

"The model can help the Chinese Government speed up the restructuring of SOEs," he said.
Apart from the appointment of independent directors, MCC has also taken other measures to strengthen its management structure. It changed its name from China Metallurgical Construction (Group) Corp to China Metallurgical Group Corp this May.

While the company will continue to be referred to by the well-known abbreviation, MCC, the new name brings with it a change in focus.

The company has decided to further reinforce its core businesses of engineering, procurement and construction (EPC), resource development, mechanical equipment fabrication and real estate development.

It built the steel production facilities for many major steel producers, including Shanghai's Baosteel Complex, Anshan Steel Works, Wuhan Iron and Steel Plant and Panzhihua Iron and Steel Plant.

The company posted a profit of 1.5 billion yuan (US$189.8 million) on sales of 69.1 billion yuan (US$8.75 billion) for 2005.

It's also looking to overseas expansion as a key part of its growth strategy. Recently it announced the establishment of two subsidiaries, MCC International Incorporation Ltd and MCC Overseas Ltd, to oversee its businesses, such as designing, engineering, procurement and construction, in foreign markets.

"Such efforts in market diversification are a part of the group's restructuring strategy and a milestone in MCC's overseas business development," Yang said.

Like MCC, more major SOEs are being encouraged to go public to boost company performance, said Shao from SASAC.

The successful dual listing of the Industrial and Commercial Bank of China in Shanghai and Hong Kong marks a milestone in the reform and development of China's banking industry and capital markets.

(For more biz stories, please visit Industry Updates)