China Steel to hold stake in $16bn steel complex

Giant Taiwanese steelmaker China Steel is closer to an agreement to acquire a 5 per cent stake in Formosa Plastic Group’s massive steel and port complex in Vietnam’s central part.

A source at Formosa Ha Tinh Steel Corporation, a wholly-owned subsidiary of Formosa Plastics Group and the investor of the complex, said China Steel’s stake in the project would be 5 per cent.

“The two side are discussing the actual price, but there is no doubt that Formosa will set up a joint venture with China Steel to build this gigantic project,” the source confirmed.

Formosa’s project, located in Ha Tinh province, is the corporation’s first steel manufacturing project worldwide. The group said it would invest about $16 billion into the project to produce 15 million tonnes of steel each year.

In the first stage of the project, Formosa will pump $8.9 billion to build a steel manufacturing factory and a deep seaport, which was previously expected to open in 2011.

In February this year, Formosa said it would start project construction this month after 30 months waiting for site clearance to be completed.

Founded in 1958, Formosa has set up factories chains in Taiwan, China and the US operating in areas of biotechnology, petrochemical processing, and production of electronic components.

In Vietnam, Formosa first received an investment licence in 2001 to build a multi-million dollar textile complex and a power plant on the 300-ha Nhon Trach industrial park in the southern Dong Nai province. – VIR

Tags: China Steel, Formosa Plastic Group

Posted by VBN on Mar 2 2011. Filed under Steel. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry