US$9.8 billion steel project off ground

The company is a 74:26 joint venture between Maju Stabil Sdn. Bhd, a unit of Malaysia's Lion Group, and Vietnam Shipbuilding Industry Group (Vinashin).

The Ca Na Steel Complex will be built on a 1,650-hectare area in Phuoc Diem Hamlet, Ninh Phuoc District over a period from 2008 to 2025 classified into four phases, according to the company.

The steel mill's capacity will be 14.42 million tons of steel per year. But in the first phase, which will be put into operation after 2011, the capacity will be 4.5 million tons per year. Key products are hot and cold rolled coils, steel plates, galvanized and coated coils, H- and I-beams, and pipes.

When it is operational, it will be an important driving force not only to the steel and shipbuilding industries but also to the development of the country's economy, according to the joint venture.

The project's supporting works are two 1.450MW power plants and a seaport with an annual handling capacity of 50 million tons.

The feedstock for the steel complex will be imported iron ores and domestic coke. Part of the steel output is to serve domestic demand, especially for the shipbuilding industry.

To develop the shipbuilding industry and increasing the ratio of local content in its finished products, Vinashin has been continuously investing in its supporting industries, especially in steel.

Vinashin and Lion initiated the idea of setting up a joint venture in Vietnam in late August 2007. Vinashin Lion Steel secured a stamp of approval from Ninh Thuan Province in September this year to build Ca Na Steel Complex.

The joint venture said in a statement that Lion Group is the biggest steel producer in ASEAN and is the first to apply new blast furnace technology to steel manufacturing. The group's turnover in fiscal 2008 was more than US$5.4 billion.

Vinashin is the largest shipbuilder and industrial conglomerate in Vietnam with a market share of 80%. Its business also includes ship repair, shipping, logistics, heavy industry, and civil and offshore construction.

Vinashin Group has more than 200 subsidiaries and affiliates throughout the country, including 28 shipyards able to build Very Large Crude Carrier vessels, six shipping companies, nine construction companies and 12 joint ventures with foreign partners.

Vietnam recently attracted many high-profile foreign-invested steel projects costing billions of dollars each.

Four months ago, Taiwan's Formosa Heavy Industries Corp started work on a deep-water port and a steel complex capitalized at a combined US$7.9 billion in the central province of Ha Tinh. The steel complex will have a total production capacity of 15 million tons per year.

Source: Saigon Times