JFE Steel acquires a stake in a steel complex project in Vietnam

Tokyo: JFE Steel Corporation has signed a $ 225 million contract to acquire a five percent stake in Formosa Ha Tinh (FHS), a joint venture that is currently building integrated steel plants in Vietnam. The project was spearheaded by the founder of Formosa Plastics Group, a Taiwanese integrated petroleum product supplier. JFE Steel will also provide technical support for the project.

According to the JFE Group's mid-term business plan, from April 2015 to March 2018, JFE Steel aims to increase its annual sales of steel products to 40 million tonnes. The company's investment in FHS is one of the first major steps towards achieving this goal.

JFE Steel plans to work with FHS to create new integrated steel mills that are stable in the region. Looking ahead, JFE Steel expects to expand JFE's business network by selling FHS-manufactured products to its customers.

The integrated steel mill will include a hot rolling mill, blast furnaces and steelmaking facilities on an area of ​​over 2,000 hectares in Ha Tinh province. JFE Steel will provide technical support services for the project starting this fall. FHS will invest US $ 10.5 billion in the first phase of the project. The initial crude steel production capacity is expected to be around 7 million tonnes per year.

JFE Steel is also considering setting up an integrated steel fabrication facility in Southeast Asia or India to meet the growing demand for steel products in developing countries. Vietnam is experiencing robust economic growth and a stable expansion of its domestic steel demand. Steel demand in Southeast Asia is also forecast to grow steadily. Vietnam is expected to become a key supply base for steel products used locally as well as in Southeast Asia and beyond.