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Nippon Steel buys into Posco’s Vietnam project
South Korea’s Posco, the world’s fourth largest steelmaker, has transferred a stake in Posco Vietnam Co. Ltd. to Japan’s Nippon Steel.
A source from the Ba Ria-Vung Tau Industrial Zone Authority (BIZA) told the Daily on the phone on Wednesday that Posco had informed BIZA of the transfer of the 15% stake to the Japanese firm.
However, Dau Tu newspaper of the Ministry of Planning and Investment said the percentage of the stake transferred was 30%.
Procedures for the transfer have been finalized and registered with the authorities, said the source.
The international media earlier reported that Posco announced last October that Nippon Steel, the world’s number two steelmaker, would buy a stake of 10 to 20% in the steel project in the southern province of Ba Ria-Vung Tau.
Posco received an investment certificate in late 2006 for its steel project worth US$1.13 billion in Phu My II Industrial Park in Tan Thanh District, some 80km southeast of HCMC. The factory under way will cover 130 hectares and produce hot-rolled and cold-rolled steel.
Work on the project started in August 2007 with the first phase requiring a total of US$361 million. The facility is expected to be operational in late 2009 with annual output of 700,000 tons of cold-rolled steel.
Cold-rolled steel is used in a variety of products such as refrigerators and automobiles.
Posco plans to produce three million tons of hot-rolled steel and 1.5 million tons of cold-rolled products, which will be supplied to both the local market and other Southeast Asian markets.
The forthcoming facility will supply steel for the automobile and shipping industries and other steel products for construction, according to the company.
The company plans to use hot-rolled coils from its Indian integrated mill as feedstock to make cold-rolled steel products in Vietnam.
Posco first entered Vietnam in 1992 with three joint ventures including a steel project.
An official of the Ministry of Planning and Investment’s Foreign Investment Agency told the Daily on Wednesday that seeking an investment license and land for a steel project would be time-consuming, so some foreign steel companies wanted to take a shortcut by investing in those projects that are already operational or licensed but not operational.
Earlier, in late 2007, two Taiwan steel giants, Tycoons and E-United, joined forces to spend US$4 billion on a steel project in Dung Quat Economic Zone (EZ) in the central province of Quang Ngai. E-United is a lead investor in the project with a total annual capacity of 10 million tons.
The two companies will import feedstock from China, Brazil and Australia.
A number of huge steel projects have been either put on hold or delayed for a long time, including of India’s Essar Steel, Taiwan’s Thien Huong and Formosa, and Vietnam’s Lilama, Bach Dang and Phu My.
The Ministry of Industry and Trade found in an inspection that 17 among 23 steel projects prioritized for implementation in 2007-2015 had remained idle.
VietNamNet, sgt
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