~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

Year :      [2003]      [2002]      [2001]      [2000]      [1999]      [1998]      [1997]

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.