BHP steel applies to build steel plant in Vietnam
HANOI - BHP Steel Ltd., Australia's
top steelmaker, said
it's applied to build a
zinc- coated and
colored steel sheet
plant with an annual
production capacity of
125,000 tons in
Vietnam, with an
investment capital
local press reports put
at $105 million.
Vietnam's Ministry of
Planning and
Investment has sent
letters of support for
the project, which has
been awaiting approval
from Prime Minister
Phan Van Khai for two
months, the Vietnam
Investment Review
reported. Vietnam's
Ministry of Industry
said last year it was
opposed to the BHP
plan, arguing it would
cause a glut as a state
company pursues a
rival project.
``The company is in
discussions with
relevant Vietnamese
authorities,'' BHP Steel
said in a statement to
the Australian Stock
Exchange. A reply is
expected in the next
few months, the
statement said. The
company said its
``focus is on
developing the
downstream
value-added products
business, particularly
in Asia.''
In March, BHP Steel
opened two plants in
China, and said it
might announce plans
for more factories in
China in the next six
months.
BHP Steel's external affairs office in Melbourne declined to comment further on the announcement.
The plant will be built in Ba Ria-Vung Tau province in southern Vietnam, according to the Vietnam Investment
Review. The delay in the company receiving the license is due to opposition from government-owned Vietnam
Steel Corp., the newspaper said.
Vietnam Steel plans to build a galvanized steel plant in Ba Ria-Vung Tau, with an annual production capacity of
150,000 tons per year, said Nguyen Phuc, director of the company's planning and investment department.
Glut ?
``We asked the functional offices not to grant investment licenses for BHP's galvanized steel project because
competition for this product is unnecessary,'' he said. ``It would cause a glut of the product in the local market.''
Current annual demand for galvanized steel in Vietnam is about 300,000 tons, which is expected to rise to about
500,000 tons by 2005, the Vietnam Investment Review said.
``Vietnam is coming from a low base, and its growth potential is very good,'' said Simon Lee, chairman of
Australia's Vietnam Industrial Investments Ltd., which operates four steel plants in Vietnam. ``In the steel
industry, Vietnam today is what Malaysia was 20 years ago, and Vietnam might grow faster than Malaysia.''
Vietnam Steel held talks with BHP Steel on a possible joint- venture, and could not agree on terms such as
ownership or management control of the venture, Phuc said. Vietnam Steel also thought the investment capital
was too large, he said.
``We know that the Ministry of Planning and Investment is likely to grant BHP an investment license, because
they want to encourage foreign investment,'' Phuc said. ``If the government consents to BHP Steel's project, we
will accept the competition.''
Vietnam Steel plans to begin construction of its plant by the end of the year, and is considering exporting to
other countries in the Association of Southeast Asian Nations, Phuc said.
By Jason Folkmanis - Bloomberg - May 5, 2003.
|