ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Business

China Steel to boost investment in Vietnamese mill

TAIPEI -- Taiwan's China Steel will raise its 5% stake in a steel mill under construction in Vietnam to 25%, pouring roughly $940 million more into the project to ensure that production there gets on track.

     It will make the additional investment this April or May in Formosa Ha Tinh Steel -- a Vietnamese arm of leading Taiwanese chemical company Formosa Plastics Group -- which is building the plant. China Steel will also boost technical support for the project.

     The initial phase of construction will cost about $10 billion, with the facility coming online by the end of the year with an annual production capacity of about 7 million tons. Plans call for investing another $10 billion to boost capacity to roughly 22 million tons, making the steel mill Asia's largest.

     The project is the cornerstone of Formosa Plastics' diversification strategy. Still, many are skeptical that the chemical company will find success in the steel industry. China Steel took a 5% stake in the project back in 2010 but initially had offered little support otherwise.

     Demand for steel is expected to rise in Southeast Asia as its growing economy fuels the automobile and appliance markets. China Steel also launched a new steel sheet factory in Vietnam with Nippon Steel & Sumitomo Metal in 2013. It sees Formosa Plastics' new venture as a key source for semifinished steel products needed for its own plant.

     Formosa Plastics temporarily halted construction when anti-China demonstrations broke out in Vietnam last May. It has also called on Japan's JFE Steel for investments and is working to get the project on track as soon as possible.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more