Posco, the world's third largest steel maker, May 23 signed an agreement with Vietnam's state-owned shipbuilder Vinashin for feasibility studies on building an integrated steel mill in the Southeast Asian country with a US$4-billion estimated investment, local and foreign media reported.
The two companies inked the memorandum of understanding in Seoul during a Vietnamese business mission’s tour headed by Deputy Prime Minister Nguyen Sinh Hung to South Korea.
Under the deal, Posco and Vinashin will study and analyze factors such as building sites, technology, raw materials and market, that will affect setting up the steel plant in Vietnam, Posco said in a statement.
The two sides hope to complete the study by the end of this year, Posco said, adding that it will push for construction of the integrated steel mill if the project is found to be viable.
“The exact plan depends on the result of the feasibility study, but annual output of the mill would be 4 or 5 million tons,” said Lee Dong-hee, Posco’s chief financial officer, on the sidelines of a South Korea-Vietnam economic forum.
Reportedly, Posco has been carrying out a separate feasibility study on the project since last November, at the request of the Vietnamese government.
The projected steelworks will be the South Korean company’s second crude steel mill abroad, as it said earlier the same day it would start constructing a $12 billion integrated steel plant in India in October as scheduled, despite local opposition.
In November last year, Posco obtained permission from the Vietnamese government to build cold-rolled and hot-rolled steel plate factories with annual production capacities of 1.2 million tons and 3 million tons respectively, in Phu My II Industrial Park of southern Ba Ria Vung Tau province.
The South Korean steel giant will kick off its $1.128 billion steel project, the biggest in Vietnam, in August this year, expecting to meet one third to one half of the country’s cold-rolled steel demand and create some 10,000 jobs by 2012. (Local and foreign sources)
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