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 Vietnam Steel Corporation, Vietnam's largest steel company
today signed a Memorandum of Understanding (MoU), with Tata Steel, world's sixth
largest and Asia's first integrated private sector steel company in steel making
for a proposed steel complex with an estimated capacity of 4.5 million tonnes
per year. The MoU was signed between Mr. Dau Van Hung, President of Vietnam
Steel Corporation and Mr. B Muthuraman, Managing Director of Tata Steel in
Hanoi. Also present on the occasion were representatives from the Office of the
Prime Minister, Ministry of Industry, Ministry of Planning & Investment from the
Government of Vietnam, His Excellency Lal T Muana, Indian Ambassador to Vietnam
and Dr T Mukherjee, Deputy Managing Director (Steel), Tata Steel and other
officials of VSC and Tata Steel.
While the Government of Vietnam is proactive
and keen on setting its economy on a fast growth path, it also
wants to achieve this on a sustainable basis. Due to its
favourable policies of attracting and encouraging investments,
the Government of Vietnam had mandated VSC to select a foreign
partner for the Steel Project based on the principle that such a
foreign partner who develops the Steel Project would be entitled
to participate in Thach Khe Iron Ore mining project with an
equity contribution of 30%. VSC has selected Tata Steel as the
foreign partner for the Steel Project, which has been approved
by the Government of Vietnam.
Tata Steel already has a Joint Venture with
VSC in Rolling Mills through NatSteel, Asia which is a Singapore
based subsidiary of Tata Steel. Tata Steel with the objective of
strengthening this relationship is partnering with VSC in
establishing a steel complex in Ha Tinh province which will be
phased over 10 years. This project will take the growth of the
steel industry of Vietnam to a higher trajectory. The project
will bring in significant economic impact in terms of
optimization of local resources, creation of employment,
development of technology and earnings of foreign exchange.
Tata Steel, in cooperation with VSC, will
undertake a feasibility study for the Steel Project. On the
successful completion of the study and financial closure, Tata
Steel will have a stake of minimum 65% & VSC will have a stake
of 35% in the Steel complex. Moreover, Tata Steel will also have
a stake of 30% in Thach Khe Iron Ore Joint Stock Company which
would undertake mining in the Thach Khe iron ore mine.
Vietnam, with GDP growth of over 8% and per
capita steel consumption of over 85 Kgs, is on the threshold of
significant increase in steel consumption including value added
steel. Both the companies firmly believe that domestic primary
steel production is fundamental for the sustainable growth of
the steel industry.
About Vietnam Steel Corporation
Established in 1995 by a merger of Vietnam
Metal Corporation and Steel Corporation, VSC is Vietnam's
largest steel company including various manufacturing plants and
a distribution system across the country. VSC is pioneer in
partnering with foreign partners in steel manufacturing. VSC has
foreign joint ventures and joint stock companies in which VSC
holds large stakes. Total capacity of VSC including that of its
joint ventures is around 5 million tons with wide range of
product mix from crude steel, high quality construction steel to
sheet and plate products serving other economic sectors. In
addition, VSC also has businesses in other areas such as mining,
real state, sea ports etc.
About Tata Steel
Established in 1907 by its Founder J N Tata,
Tata Steel is the flagship of Tata Group, the largest and most
respected business house in India having interests in Steel,
Automobiles, Telecom, IT, Energy, Hotels. The Tata Group
comprises around 90 companies with total turnover of US$22
billion, equivalent of around 3 per cent of India's GDP.
Tata Steel has one of the most modern steel
making facilities and is also one of the lowest cost producers
of steel in the world. It has been rated as the world's best
steel company for the past three consecutive years by World
Steel Dynamics. World over, Tata Steel currently has a capacity
of around 26 million tonnes per annum including its recent
takeover of Corus and has the second largest global distribution
network in 45 countries. Tata Steel which has also set
benchmarks in the fields of corporate social responsibility and
corporate governance firmly believes in improving the quality of
life of its employees and the communities it serves. Tata Steel
aspires to become a 50 Million tonne Steel Company by 2015.
The cooperation between VSC and Tata Steel
signals the beginning of strong growth of the Steel Industry in
Vietnam. We believe that this partnership will result in
remarkable success.
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