Hanoi - India's Tata Steel Ltd has inked a deal with two
Vietnamese state corporations to build a 5-billion-dollar
joint-venture steel complex in the communist country, an official
said Thursday.
The new project is the fifth major steel plant in development in
Vietnam, where steel consumption and imports have risen rapidly with
its economic growth.
Tata Steel signed the agreement with Vietnam Steel Corp and
Vietnam Cement Industries Corp in Hanoi Wednesday, said Pham Chi
Cuong, chairman of the Vietnam Steel Association.
'Signing the agreement is the first step towards building the
complex,' Cuong said. 'The next step is to obtain an investment
license from the government.'
Cuong said the joint venture would get a license quickly because
Prime Minister Nguyen Tan Dung had agreed upon the project in
principle.
He said the plant would be the second-largest steel project in
Vietnam after a plant under construction by Taiwan's Formosa Group
with a planned production capacity of 7.5 million tons of steel a
year.
According to the agreement, Tata Steel and its Vietnamese partners
would build the plant in the Vung Ang Economic Zone in Ha Tinh
province, 350 kilometers south of Hanoi. Tata is to contribute 65 per
cent of the total investment capital of 5 billion dollars, Vietnam
Steel 30 per cent and Vietnam Cement the remaining 5 per cent.
Cuong said the first phase of the project was scheduled to become
operational in 2011 and the plant would become fully operational in
2013 with an annual capacity of 4.6 million tons of steel.
Besides the Tata and Formosa Group plants, Taiwan's Tycoons and
E-United are building a 1-billion-dollar plant while two other
multi-billion-dollar plants by Korea's Posco and Malaysia's Lion
Group are awaiting investment licenses.
According to government statistics, Vietnam spent more than 5
billion dollars to import 6.4 million tons of steel in the first
seven months of this year, up 96 per cent from the same period a year
ago.
The new plants would help reduce Vietnam's trade deficit, which
was expected to total nearly 20 billion dollars this year.
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