Korean steel biggie leases land for $1.12 bln steel complex
POSCO Co. Ltd, the world's third-largest steel maker has clinched a land-lease agreement with a local firm to build hot-rolled and cold-rolled steel plants in Vietnam’s southern Ba Ria-Vung Tau province.
Following the deal signed Wednesday with the Industrial Park and Urban Investment Development Corporation (IDICO), POSCO Vietnam – the arm of POSCO Co. Ltd – will lease 130 hectares in the Phu My Industrial Park 2 for the hot-rolled and cold-rolled steel complex, both worth US$1.12 billion.
The value of the leasing contract was not unveiled.
The Korean investor is set to start work on the cold-rolled steel facility with an estimated cost of $361 million in August.
The mill will churn out 700,000 tons of cold-rolled products annually when it comes on line in 2009.
Cold-rolled steel is used to manufacture different types of roofing and steel sheets in construction, industry, and mechanical engineering.
POSCO’s hot-rolled steel facility, estimated to cost $767 million, is designed to produce 3 million tons annually.
The products will be for sale in the local market and other Southeast Asian countries.
The Republic of Korea's top steel maker views Vietnam as a gateway to the Southeast Asian market, the world's largest steel importer, and has also expanded facilities in India and Mexico.
Vietnam spent $842 million on importing nearly 1.5 million tons of steel billets and finished products in the first quarter of this year, posting year-on-year rises of 69.3 percent and 41.1 percent, respectively.
It has forecast imports of over 2 million tons of steel billets, production of 2.3 million tons of steel billets, and consumption of some 4 million tons of construction steel this year.
The country imported over 5.6 million tons of steel billets and finished steel products totaling $2.9 billion in 2006, up 1.8 percent in volume but down 0.9 percent in value over the previous year.
Steel makers in the country had a combined annual production capacity of some 6 million tons by late last year, according the Vietnam Steel Association.
Vietnam’s partial dependence on steel billet imports has made local-made steel products less competitive as compared to imported products.
Source: Sai Gon Giai Phong – Compiled by Dong Ha |
