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Tata Steel acquires two steel rolling mills in Vietnam
As part of the Company’s focus on regional consolidation, Tata Steel through its wholly-owned subsidiary NatSteel Asia Pte. Ltd. (NSA), has entered into an agreement to acquire controlling equity stake in two rolling mills located in Haiphong, Vietnam, has entered into a conditional agreement with Vietnam Industrial Investments Ltd (VII) to acquire:
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A 100% stake held by VII in Structure Steel Engineering Pte Ltd (SSE(S))
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A 70% stake held by VII in Vinausteel Limited. The remaining 30% share is held by Vietnam Steel Corporation (VSC)
By virtue of the acquisition of the respective stakes, NSA will effectively have acquired two rolling mills located in Haiphong, North Vietnam:
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A 250k tpy bar/wire rod mill operated by SSE Steel Ltd (a wholly-owned subsidiary of SSE(S)).
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A 180k tpy reinforcing bar mill operated by Vinausteel Ltd.
The enterprise value for the acquisition is USD41 million, subject to certain closing adjustments on completion. The transaction should be completed by June 2007.
SSE Steel has one of the most modern rolling mills in Vietnam and the Vinausteel brand is one of the best known brands in Vietnam for reinforcement bars. The acquisition of these two mills will allow Tata Steel - NSA Group to complement, strengthen and expand its current presence in Vietnam. The Group presently operates a 100 k tonnes per year reinforcing bar/wire rod mill in a joint venture with VSC in Thai Nguyen which is located about 70km north of Hanoi. The stake in these companies is to be acquired from Vietnam Industrial Investments Ltd., an investment holding company listed on the Australian Stock Exchange.
Mr Oo Soon Hee, President and CEO of NSA, said: “The Vietnamese steel market has been growing at a healthy rate over the past five years. NSA believes the market for steel products in Vietnam will continue to grow at a strong pace as consumption of steel products in Vietnam on a per capita basis is relatively low. We are glad to have this opportunity to work closely with VSC to enhance our strategic presence in Vietnam.”