Formosa Mulls US$12 Bln Steel Complex in Central Vietnam

Taiwan’s Formosa Heavy Industry group said it is seeking Vietnamese government’s permission to build a two-phase steel complex costing US$12 billion in the central Ha Tinh province, Investment newspaper reported Friday.

 

Formosa will develop the facility on an area of 2,000 hectares with 100 per cent foreign investment, said the source, adding that Formosa will contribute 95 per cent and Sunsteel Corp will provide the remaining.

 

They will submit their pre-feasibility study for the complex this March.

 

In the first phase to 2011, the joint venture plans to invest US$6 billion in the complex and expects to produce 7.5 million tons of ingot steel, hot-rolled steel and sheet hot-rolled steel, said an official of Formosa.

 

The Taiwan-invested group will buy iron ores from CVRD, Rio Tinto, BHP mines and from Thach Khe mine once the local mine operational.

 

The remaining US$6 billion will be injected in the second phase to raise production capacity to 15 million tons a year, said the official without giving details.

 

Annually, Vietnam needs 4 million - 4.2 million tons of steel sheets while its steel makers can produce just 300,000 tons a year so the remainder is bought from China, South Korea, Japan and the Philippines. The country is forecast to need seven million tons of steel sheets in 2010.

 

In 2007, authorities of central Danang province rejected a proposal to build a US$1 billion steel mill in the province’s Hoa Khanh IP of China Steel, Sumitomo Metal Industries and Vedan Enterprise Corps for the fear of negative impacts on local environment. (Investment, Labor)