Nippon Steel: Vietnam plant to tap Asian projects

Nippon Steel Corp (5401.T: Quote), the world’s second-biggest steelmaker, said it would start producing steel pipe and steel sheet piles in Vietnam to tap burgeoning infrastructure projects in Asia and Oceania countries.

Vietnam plans a large number of infrastructure projects such as railways, roads, ports and power generation, while demand for construction steel has halved in Japan in the past two decades due to the maturing economy and public spending cuts.

The Vietnamese plant, near Ho Chi-Minh city, will be Nippon Steel’s first overseas production base for construction steel and will start operating in May 2011 with a capacity of 5,000 tonnes a month.

“We expect Vietnam’s demand for construction steel to surge as lighter-weight steel will soon start replacing cement in infrastructure projects,” Eiji Hashimoto, a director at Nippon Steel, told a news conference. Vietnam’s demand for cement, at 50 million tonnes a year, has already topped that of Japan.

Hashimoto said he expects the new plant to operate at full capacity in three to five months after initial shipment because of large demand and a lack of rival firms.

The new plant will be owned 51 percent by Nippon Steel and 10 percent by government-owned Vietnam Steel Corp. Five Japanese trading houses will hold the remaining 39 percent stake.

Vietnam’s state oil and gas group was seeking investments by Japanese firms in 28 projects in downstream oil, power plants and other businesses, a Japan External Trade Organisation official said this month.

Nippon Steel has recently been stepping up exports of construction steel as prolonged doldrums in Japan’s construction sector have weighed on its earnings.

Last year the company supplied 16,000 tonnes of its 38 metre (125 ft) steel sheet piles for use in South Korea’s Inchon Bridge, connecting Inchon International Airport and the city. – Reuters

Tags: Nippon Steel, Vietnam steel industry, Vietnam steel market

Posted by VBN on Jul 7 2010. 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