Indian company to set up $527 mln steel mill in Vietnam
India's Essar group Monday signed a joint venture contract with two state-run companies in Vietnam to build a $527-million hot-rolled steel mill in southern Ba Ria-Vung Tau province.
The Vietnam News Agency reported that under the contract, Vietnam Steel Corporation (VSC), Vietnam's largest steel producer, and Vietnamese rubber group Geruco will partner with Essar to establish a joint venture in which the Indian group would hold a majority 65 percent stake.
"The company will be a share-holding entity with Essar as one of the founding shareholders," Reuters quoted an official in VSC's investment department as saying Monday.
VSC would hold 20 percent and Geruco the remaining 15 percent of the company that will operate the mill to produce 2 million tons of steel sheets a year, the official told Reuters.
The mill is scheduled to be put into operation in 2009 and would use billets imported from India, according to the Vietnam News Agency.
Essar, a diversified, family-owned holding company, has business interests from telecommunications to construction. It also plans three steel plants in the Middle East, including a 1.5 million-ton-a-year steel plant in Iran.
Geruco, the short name for Vietnam General Rubber Corporation, is the country's largest rubber producer. It has been diversifying, investing in hydro-power plants, wood processing and cement production.
On Saturday, it signed a deal to become a major shareholder in the partly private Saigon Hanoi Bank.
Vietnam relies on the imports of steel and billets, mainly from China. Last year, its imports of the products edged up 1.8 percent from 2005 to 5.62 million tons, government figures show.
Earlier Posco - a giant steel maker from the Republic of Korea, got its investment license to build a cold rolled steel facility, also in Ba Ria-Vung Tau province. |
