Formosa pushes on with its mega project

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Báo Đầu Tư English - 43 month(s) ago 596 readings

Formosa pushes on with its mega project

“We are pushing the construction process to ensure we put the factory into operation in 2014”

Formosa Plastics Group’s new steel plant and port will be key drivers for Ha Tinh province’s growth

After a three-year delay caused by site clearance issues, Taiwanese-backed Formosa Plastics Group is now pushing head with construction of its mammoth steel and seaport complex in central province of Ha Tinh. It’s a move that has encouraged other investors to kick start their own projects in the zone. Ngoc Linh reports.

On a 2,000-hectare site at coastal Vung Ang economic zone in the central province of Ha Tinh, Formosa Plastics Group (FPG), through its subsidiary Formosa Ha Tinh Steel Corporation, is hastily carrying out the first stage of works on its mammoth steel and seaport complex.

The site will be home to what Hsu Chih Hao, a manager at Formosa Ha Tinh Steel Corporation, said would be among the top five largest steel manufacturing factories in the world.

“We are pushing the construction process to ensure we put the factory into operation in 2014,” said Hao.

To date, FPG has pumped about $150 million into this project, said Hao. That doesn’t include the $30 million the group gave to Ha Tinh People’s Committee for site clearance.

What FPG is now doing in Vung Ang economic zone has dispelled doubts over its seriousness in regards to this $8.9 billion project and its financial ability after three years of delay.

Those doubts boiled over last summer when some local media outlets said the FPG had no intention of developing the site.

But now FPG, which is making its first foray into the steel industry, is realising its plans. In the first phase of construction, FPG will build a steel factory with total annual capacity of 7.5 million tonnes. In the second phase, the investor plans to raise investment to $16 billion to build a factory with total annual capacity of 15 million tonnes of steel.

Hao blamed the project’s three-year delay on slow site clearance. Originally Ha Tinh People’s Committee promised to complete site clearance within eight months. Instead, FPG had to wait until the end of last year to take hold of the entire cleared site.

“We are satisfied with the construction progress of Formosa at present. It is doing very well,” said Phan Binh Minh, deputy director of Vung Ang Economic Zone Management Authority.

FPG is currently dredging a channel to provide access to the sea at Son Duong port.

At the same time, it is also levelling the project site. Those works are expected to be completed by the end this year.

During the process of dredging the channel, a hopper dredger hit a mine left over from the Vietnam War and was broken. However, Hao said this would not seriously impact on the construction schedule of the project. “There are many difficulties, but we are sure we will start the construction of the steel factory by the end this year,” he said.

Last week, FPG also kicked off construction of the first phase of the 250ha, 14-berth Son Duong port which will mainly serve the steel factory. Furthermore, the Taiwanese company would also start construction of a 750 megawatt thermoelectricity plant in this site to ensure the power supply at the complex.

FPG’s port and steel manufacturing factory complex are expected to be a driving force for the development of Ha Tinh province in particular and for the central region in general. The investor estimates the project, once completed, could create 10,000 direct jobs and about 100,000 indirect jobs.

Minh is also upbeat about the impact of FPG’s construction. “Actually, the implementation of Formosa’s project is breathing new life into other projects,” he said, adding that Vung Ang would be a hub of steel industry in Vietnam.

With its huge labour requirements, the FPG project will need a series of service projects nearby. According to Vung Ang Economic Zone Management Authority, the zone has attracted more than 60 investment projects so far. These include a vocational school and hi-tech park invested by Korean Vison Land Ltd and a $78 million five-star hotel and office building complex invested by Human City Company.

Also on the cards is the Polaris KTY-invested Tau Voi Lake tourism project, capitalised at $70 million.

Minh said the implementation of those projects had been relatively slow until FGP took hold of its cleared site.

“[Now] they want to put the projects into operation soon to serve the demands of workers and staff at Formosa’s project,” said Minh.

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