Japan steel maker eyes giant steelworks in Dung Quat
By Quoc Hung - The Saigon Times Daily
HCMC – Japan’s JFE Steel Corporation has expressed its interest in joining the US$4.5-billion steel project of Taiwan-invested Guang Lian Steel Vietnam Co., Ltd in Dung Quat Economic Zone in Quang Ngai Province.
The Japanese firm says on its website that it has signed a memorandum of understanding with Taiwan’s E-United Group to jointly study the feasibility of building the steelworks of Guang Lian in Dung Quat. Currently, E-United is holding the majority of stake of this project.
JFE Steel wants to become a shareholder of the project and is also seeking investment opportunities in Southeast Asia or India to meet the increasing demand in these emerging markets. Having a high steel demand and the steady economic development, Vietnam is regarded as a good place to produce steel products for export and domestic consumption.
The Japanese steel maker expects the feasibility study for this steelworks will be completed late this year.
Le Van Dung, deputy head of the management unit of Dung Quat Economic Zone, told the Daily on Wednesday that the unit has been informed by Guang Lian Steel of JFE Steel’s intention of joining the project but yet to receive an official dossier on the changes.
Dung said the participation of JFE Steel would help accelerate the construction progress of the project and produce high-quality steel products.
JFE Steel is one the few companies producing steel plates used in auto manufacturing, and the firm will produce such products if joining the steelworks, he added.
Besides, with the participation of the world’s sixth largest steelmaker, the project’s technologies may be adjusted based on JFE Steel’s standards which are friendly to the environment, Dung said. However, the site allocated for the project cannot be expanded as it has been surrounded by many other plants, he said.
Currently, the steelworks of Guang Lian is 90% owned by E-United and the rest by Taiwan’s steel maker Tycoons. The investors have yet to receive a certificate to adjust investment capital from US$3 billion to US$4.5 billion.
It is because the management unit of Dung Quat Economic Zone only issues the license after seeing the investor’s proven capital capacity.
After great efforts, E-United has finally been able to borrow capital from the Export-Import Bank of China to carry out project, and Guang Lian is also completing procedures to obtain the license soon. With the capital increase, Guang Lian will adjust the plant’s annual production output from five million to seven million tons.