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Vietnam Steel, Vicem and Tata Steel to Build 4.5-Million TPY Steel Complex
08/14/2008 - Vietnam Steel, Vietnam Cement Industries, and Tata Steel sign joint venture agreement for a proposed 4.5-million tonnes/year steel complex in Vietnam.
Vietnam Steel Corp., Vietnam Cement Industries Corp. (Vicem), and Tata Steel have signed a joint venture agreement (JVA) for a proposed 4.5-million tonnes/year steel complex in Vietnam.
The new integrated steel complex will be set up in the Vung Ang Economic Zone in Ha Tinh Province. It will be built in three phases at a total estimated cost of US$ 5 billion. The first phase of the complex will be a cold rolling mill that is to be commissioned by end 2010.
The new integrated steel complex will be set up in the Vung Ang Economic Zone in Ha Tinh Province. It will be built in three phases at a total estimated cost of US$ 5 billion. The first phase of the complex will be a cold rolling mill that is to be commissioned by end 2010.
The three companies signed an initial memorandum of understanding for this steel project on May 29, 2007. Definitive agreements were then signed following completion of detailed feasibility studies. Tata Steel will have a 65% stake in the venture, while Vnsteel will have a 30% stake and Vicem will hold a 5% stake.
“We are delighted to enter into the joint venture with VNSteel and Vicem, and believe that this partnership is well placed to make the most of the tremendous growth potential Vietnam possesses,” commented B Muthuraman, Managing Director, Tata Steel. “Together, we look forward to seeing this country grow and prosper. We are excited to be a part of this landmark project that is slated to bring sustainable and long-term value to our companies and customers, and accelerate the development of Vietnam.
“On our part, we remain committed to bringing high standards of corporate governance, environment protection, and a strong culture of striving for excellence,” added Muthuraman. “We also highly appreciate the support we have got from the Government of Vietnam & the leaders of Ha Tinh Province, proving once again that Vietnam is a cherished destination for serious foreign investors.”
On the occasion of signing of the Definitive Agreements, Dau Van Hung, President VnSteel said, “The JV will enable VnSteel to expand and create a substantial knowledge and technical base, while building a long term relationship with Tata Steel. In Tata Steel, we have a strong partner to help us exploit the opportunities within our country, and make the most of our market potential.
“Setting up an integrated steel plant will enhance Vietnam’s status in the steel industry, and maximize the value of Vietnam’s natural resources while strengthening our national economy and increasing job opportunities,” added Dau Van Hung. “We look forward to an enduring partnership with our JV partners to meet the challenges of the future”.
Echoing the same sentiments, Nguyen Ngoc Anh, General Director VICEM noted, “Vicem is honoured to have this unique opportunity to establish a JV with Tata Steel & VnSteel, and trust that this venture will add momentum to the economic progress of our country, and go a long way in addressing the country’s demand for self- sufficiency in steel. Vietnam is a very attractive market, with a growing population and demand for steel products, and this joint venture will be a strong platform to pursue growth opportunities.”
Vietnam Steel Corp. (Vnsteel), Vietnam’s largest steel company, was established in 1995 by a merger of Vietnam Metal Corp. and Steel Corp. With various manufacturing plants and a distribution system across the country, Vnsteel is a pioneer in partnering with foreign companies in steel manufacturing. Vnsteel’s total capacity, including that of its joint ventures, is around 5 million tonnes with a wide product mix that spans from crude steel and high quality construction steel to sheet and plate products serving other economic sectors. In addition, Vnsteel also has businesses in other areas such as mining, real state, sea ports etc.
Established in 1907 by its Founder J N Tata, Tata Steel is the flagship company of Tata Group, which is the largest and most respected business house in India. With interests in steel, automobiles, telecom, IT, energy, and hotels, the Tata Group comprises around 90 companies with total turnover of US$65 billion, equivalent of around 3% of India’s GDP.
Tata Steel has one of the most modern steelmaking facilities and is one of the lowest-cost producers of steel in the world. It has been rated as the world’s best steel company for the past three consecutive years by World Steel Dynamics. Tata Steel currently has a capacity of around 30 million tonnes/year and has the second-largest global distribution network in 45 countries. Tata Steel has set benchmarks in the fields of corporate social responsibility and corporate governance, and it firmly believes in improving the quality of life of its employees and the communities that it serves.
