Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業) is to study the feasibility of building a third furnace to expand production, the Ha Tinh, Vietnam-based firm said on Monday.
Demand for steel from the Southeast Asian market has been strong, prompting the company to mull the possibility of expansion, chairman Chen Yuan-cheng (陳源成) told reporters.
However, whether it follows through on the idea depends on its shareholders and on whether the Vietnamese government would support the plan, Chen added.
Formosa Ha Tinh Steel’s second furnace, located in the Vung Ang Economic Zone of Ha Tinh Province, started operations on May 18, while the first furnace became operational on May 29 last year.
Chen said that the first furnace rolled out about 1.6 million tonnes of molten iron last year, while the second furnace, which is operating at 95 percent, is expected to produce 5 million tonnes this year, generating US$2.5 billion in sales.
Production from the second furnace this year is expected to boost economic growth in Vietnam by 1.27 percentage points, up from 0.45 percentage points last year, according to an estimate by Formosa Plastics Group (FPG, 台塑集團).
The group, which is the largest shareholder in the Ha Tinh Steel venture, owns a 70 percent stake, while China Steel Corp (中鋼) holds a 25 percent stake and Japan’s JFE Steel Corp 5 percent.
The shareholders have invested more than US$10 billion in the steel mill, making it the largest foreign investment in Vietnam.
A feasibility plan would be conducted on the third furnace by next year at the earliest, given US-China trade tensions, and other factors, Chen said.
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