September 08, 2008

Sumitomo Metal and CSC plans a JV in Vietnam

Japanese Sumitomo Metal Industries Ltd has decided to launch a feasibility study regarding a JV with Taiwanese China Steel Corporation in a suburb of Ho Chi Minh City of Vietnam

The JV will manufacture and sell steel sheets and its facilities are expected to include a cold rolling mill, a continuous galvanizing line, and electromagnetic steel sheet production equipment.

Annual sales volume for the joint venture is expected to be 1.7 million tonnes and the cost of setting the joint venture up is projected to be more than USD 1 billion. The JV is likely to start production by 2011.

Sumitomo Metal Industries and China Steel jointly own an upstream JV at Sumitomo's Wakayama works in Japan called East Asia United Steel Corporation The partnership and the venture, formed in 2003, have resulted in higher operations at the plant and a tighter market in Japan. China Steel in August agreed to take a 15% stake in Sumitomo Metal's steel processing centre in Thailand. Sumitomo Metal then said it would take a stake in China Steel's planned Vietnamese venture.