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Huge steel project licensed
Ba Ria-Vung Tau Industrial Zone Authority (BIZA) has awarded an investment certificate for a US$1.15 billion steel mill in the southern province of Ba Ria-Vung Tau. The project, the biggest foreign investment in the country in the year to date, involves an international alliance.
A representative of BIZA told the Daily on the phone late last week that the investors included China Steel Corporation (CSC) with a stake of 51%, Sumitomo Metal Industries, Ltd. (Sumitomo Metals) with 30%, and Sumitomo Corporation (5%), among others.
The venture named China Steel Sumikin Vietnam Joint Stock Company (or CSVC) will develop the project on 109 hectares at My Xuan A2 Industrial Zone of the province to serve the automobile, shipbuilding, electronic and energy industries. Most local steel manufacturers produce steel for construction.
The project with an annual output capacity of 1.6 million steel tons will take four years to construct, according to BIZA.
CSVC will have a full lineup of high-class steel sheet products including those used for automobiles, such as cold rolled coils, electromagnetic steel sheets and hot-dip galvanized steel sheets.
The company expects to commission the facility in early 2013.
Sumitomo Metals and China Steel Corporation studied the construction of a steel sheet mill in Ba Ria-Vung Tau in end-2007. The representative of BIZA said the project had been licensed by BIZ after getting approval from the Government.
According to BIZA, the new project is large in comparison to a steel project South Korea’s Posco is building in Phu My 2 Industrial Park in the same province.
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.
Posco plans to use hot-rolled coils from its Indian integrated mill as feedstock to make cold-rolled steel products in Vietnam.
Posco, the world’s fourth largest steelmaker, has recently transferred a stake in its project in Ba Ria-Vung Tau to Japan’s Nippon Steel. The source said that Posco had informed BIZA of the transfer of the 15% stake to the Japanese firm. Posco received an investment certificate in late 2006 for its steel project worth US$1.13 billion in Phu My 2 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.
Ba Ria-Vung Tau is emerging as an attractive destination for investors in heavy industry such as steel production though a number of huge steel projects have been either shelved or delayed, 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 of 23 steel projects prioritized for implementation in 2007-2015 had not got off the ground.
VietNamNet, SGT
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