VN’s steel industry firms up

VNGOP – Việt Nam's steel industry is heatening up on the back of foreign investors queuing up to take advantage of the country's expanding economy and increasing demand for steel from the domestic construction sector.

July 25, 2007 7:13 AM GMT+7

India's Tata Group, one of the six largest steel companies globally exemplifies the interest that overseas firms have in the market. The group is about to get a US$ 3.5 billion rolled steel facility underway near the Thạch Khê iron mine in central Hà Tĩnh Province that when fully operational will roll out 4.5 million tonnes a year.

President of the Việt Nam Steel Association Phạm Chí Cường said the presence of big international steel groups in Vietnam reinforced the attractiveness of a Vietnamese steel market that has been fuelled by an average yearly domestic demand growth of 40 percent.

Hooking up on a joint venture in Hải Phòng to produce steel pipes and rolled steel and another in Hồ Chí Minh City to manufacture corrugated iron, the Republic of Korea's Posco Group is now planning to invest in a steel plant with a total output capacity of 3 million tones of rolled steel at the Phú Mỹ 2 Industrial Zone in southern Bà Rịa-Vũng Tàu Province. Work on the US$ 1 billion plant is scheduled to begin in August.

Mr. Phạm Chí Cường revealed that Posco has also signed a deal with the Việt Nam Shipbuilding Industry Corporation (Vinashin) to build a steel complex with a capacity of 5 million tonnes of steel plates and rolled steel per year.

India's Essar has also linked up with the Việt Nam Steel Corporation and the Việt Nam Rubber Corporation on a US$ 527 million project in Bà Rịa-Vũng Tàu Province that will pump over 2 million tonnes of rolled steel per year into the domestic market.

In central Quảng Ngãi Province, Taiwan’s Tycoons and E-United have received the green light from the local authorities to invest US$ 1.8 billion in a plant in the Dung Quất Economic zone. Construction of the plant is slated to begin in mid-October.

George E. Kobrossy, General Director of Zamil Steel Việt Nam, which has been operating in the country for over a decade, pointed to a low cost work force, political stability, incentives from the Vietnamese Government and a readiness of local businesses to cooperate as primary reasons for the boom in the industry.

(Source: VNA)