Japan's JFE Steel to pump $220 mln in Vietnam steelworks

JFE Steel, Japan's second-biggest steelmaker, said on Thursday it would invest 27 billion yen ($220 million) in a steelworks being constructed by Taiwan's Formosa Plastics Group in Vietnam in a bid to expand its global network.

(VNF)- JFE Steel, Japan's second-biggest steelmaker, said on Thursday it would invest 27 billion yen ($220 million) in a steelworks being constructed by Taiwan's Formosa Plastics Group in Vietnam in a bid to expand its global network.

Addressing a press conference in Tokyo, Shinichi Okada, Executive Vice President of the JFE Holdings Inc – JFE Steel's parent, affirmed that the investment is part of the corporation’s mid- to long-term growth strategy given Japan’s dwindling local demand.

The decision comes at a time when the steel industry globally is struggling with overcapacity and sluggish demand in China, the world's top buyer.

Japan's JFE Steel to pump $220 mln in Vietnam steelworks

Part of the Formosa Ha Tinh Steel in central Vietnam. Photo: VNA.

JFE plans to purchase five percent stake in the plant's operating company, Formosa Ha Tinh Steel (FHS), which is investing 10.5 billion USD in the first phase to build a rolling and metallurgy workshop in the central Vietnamese province.

Operation, with an expected initial capacity of seven million tons of crude steel a year, is slated to begin this autumn.

The Japanese steel maker will provide technical support and sell some of the products through its customers in Southeast Asia.

Formosa Plastics, Taiwan's top plastics conglomerate, plans to invest further in the second phase to expand the plant's capacity to 22.5 million tons a year, but JFE representatives said the Japanese company had not decided whether or not it will join the expansion phase.

Under JFE's three-year business plan unveiled in April, it will spend 200 billion yen on overseas expansion to further propel its growth and counter an expected drop in demand in Japan where the population is declining./.

by VNF

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