China Steel announces Vietnam venture

China Steel Corp (中鋼), the nation's largest and sole integrated steelmaker, said yesterday it would invest US$293 million to produce steel in Vietnam in a joint venture with a group of overseas steelmakers, including Japan's Sumitomo Metal Industries.

The joint venture's total capital would be US$1.15 billion, said Chung Lo-min (鍾樂民), spokesman and an executive vice president of China Steel.

Chung said China Steel should be able to secure a controlling stake after the two main investors finish negotiating with several other potential partners in Taiwan and Japan for the project, which is scheduled to commence in June.

The planned steel production plant would have an annual capacity of 1.7 million tonnes after it begins production, which is currently planned to start in 2011, he said.

"China Steel is looking at not only the Vietnamese market but also its neighboring markets and aims to take advantage of the new plant's geographic proximity to those markets. The investment will help the company get closer to its customers," Chung said.

China Steel said it would raise half of the initial investment from its own funds and finance the other half in bank loans to meet its part of the deal, he said.

China Steel plans to produce both cold-rolled steel plates and galvanized steel plates at the new Vietnamese facility.