Sumitomo Metals, China Steel to Build Sheet Steel Plant in Vietnam

Sumitomo Metal Industries announced on Thursday the firm and China Steel of Taiwan decided to build joint new sheet steel plant in Vietnam for around 100 billion yen to make cold rolled flat steel, coated steel and electrical steel. They submit the application for the authorization by Vietnamese government launching the plant in 2011 to meet growing demand for appliances and automobile in Southeast Asia. They still work for the detail and consider 1.7 million tonnes of annual output capacity. The plant is the first Vietnamese production site for Japanese integrated steel makers. They build new pickling and cold rolling mill, coating line and electrical steel making facility near Ho Chi Minh. The plant supplies cold rolled flat steel, galvanizing steel and electrical steel for automobile, appliances and construction industry. The parent companies supply materials hot band from additional capacity when Sumitomo Metals expands the no.2 blast furnace at Wakayama works and China Steel builds new integrated steel plant with 5 million tonnes of output capacity at the subsidiary, Dragon Steel. The joint venture could have marketing force to sell the products by itself. Sumitomo Metals said the firm could have around 30% interest in the joint venture as China Steel has 30% interest in East Asia United Steel, which is the upper stream joint venture for Wakayama works, though they are still studying the detail. Sumitomo Metals established East Asia United Steel with China Steel to supply slab to China Steel. They also expand the cooperation including cross shareholding in their Vietnamese coil centers each. They agreed for the new sheet steel joint venture when they try to expand the Asian sheet steel business. Sumitomo Metals has electrical steel processing plant, Thai Sumilox and automobile wheel making subsidiary, Ring Techs’ plant in Guangzhou. The firm has studied potential offshore sheet steel making plant in recent years. The firm said the firm tries to supply high valued sheet steel for transplants of Japanese automakers and appliances makers through the joint venture for next growth when Vietnam economy grows annualized 15% and the neighbor countries also grow rapidly.