Review of Operations

Vietnam Projects

Vietnam is one of the fast growing economies in South East Asia with a GDP growth of 7-8% and an industrial growth rate of around 11%. The manufacturing sector share has grown from 28% in 1995 to 41% in 2008. Favourable demography, balanced economic policies coupled with investor-friendly incentives and the government’s initiatives to create infrastructure for projects, makes Vietnam a good investment destination.

The total steel consumption in Vietnam is around 10 mtpa while the crude steel production is 2.5 mtpa, the balance met through imports of semi products or finished goods. There is thus, a good opportunity for an integrated steel project.

Tata Steel signed an MOU with Vietnam Steel Corporation in 2007 to set up a steel mill. Subsequently, it signed a Joint Venture (JV) agreement with Vietnam Steel Corporation (VNSTEEL) and Vietnam Cement Industries (VICEM) for the proposed steel complex in Vietnam. Tata Steel will have a 65% stake in the JV. An application for the investment license has been submitted to the Vung Ang Economic Zone.

The JV is also in the process of finalising the port-based land for the 3 phases of the steel complex and township.

Tata Steel will also take a 30% share in the nearby Thach Khe iron ore mine that is about 60 Kms from the steel project.

The Company has completed the feasibility study for the steel complex which will be developed in 3 phases. Tata Steel in co-operation with VNSTEEL and VICEM, has also completed the detailed project report for Phase 1 i.e. the cold rolling mill.