Posco moves forward on Vietnam plant

Posco plans to build an integrated steel mill in Vietnam that could be its third plant abroad, following those in China and India, said Korea’s top steel firm yesterday.
The project involves a mill that will churn out 4 million to 5 million metric tons of steel products a year. The plan is taking shape after Posco signed a memorandum of understanding with Vietnam’s biggest shipbuilder, Vinashin Shipbuilding Industry Corp., in central Seoul yesterday.
The partners said they would finish a feasibility study on the steel mill by the end of this year.
“We will expedite our plan because key global steel players are closely eyeing the Vietnamese market,” said Posco in a statement.
The joint research, according to the agreement, will cover market supply and demand, convenience of acquiring raw materials and the status of technology, facilities, sites and logistics. Posco Chairman Lee Ku-taek said the exact location and production capacity have not been confirmed.
“Should we complete a steel mill in Vietnam, our global annual production capacity is expected to surpass 50 million metric tons, including 35 million metric tons in Korea,” said Posco.
According to the steel producer, the production capacity of the steel mill in Vietnam will be less than that of its plant in India, which will produce over 12 million tons per year when it enters operation in late 2010.
Construction of the Indian plant in the eastern state of Orissa is scheduled to start late this year.
In November of last year, the world’s fourth-largest steel producer finished a stainless steel mill in China.
Vinashin, directly controlled by the Vietnamese Prime Minister’s Office, has nearly 100 affiliates in industrial fields, including marine transportation, engineering and construction, according to Posco. The Vietnamese firm’s assets amounted to $2.2 billion as of late 2005, which Posco said was another sign of a good partner.
The Vietnamese government last week asked Posco to produce 1.2 million metric tons of hot-rolled steel products and 3 million metric tons of hot-rolled steel goods. Construction of a cold-rolled steel plant near Ho Chi Minh City is set to begin this year.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]