JFE Steel to Start FS for Vietnam Integrated Steel JV with E United Group

JFE Steel announced on Tuesday the firm starts feasibility study for joint integrated steel project in Vietnam. The firm signed memorandum of understanding with E United Group of Taiwan for JFE Steel to participate in E United Group’s project and control majority of the joint venture. The project would start operation for the first phase with annual around 3.5 million tonnes of raw steel output capacity in 2016 to make mainly sheet steel products. JFE Steel builds the first offshore integrated plant as a part of effort to accelerate Asian business toward long term vision of one of world top class steel suppliers. The firm establishes multiple Asian supply bases including Japanese existing capacity and potential base in India through alliance with JSW Steel.

They keep talking for detail of the project. They would confirm the feasibility of the project in the year to start construction in 2013. They eye potential expansion while they have no specific plan for the second phase.

E United Group already established the local company, Guang Lian Steel (Vietnam) with license from local authority. The local company already secured site in Dung Quat Economic Zone in Quang Ngai, which is located in around 90 kilometers south of Da-nang and started preparation for the land.

JFE Steel and E United Group started the talk for joint venture in September 2011. JFE Steel decided the advance study for the project with the land while JFE Steel has other studies in Vietnam, Thailand and Philippines. JFE Steel expects the firm can serve growing demand in Vietnam and Southeast Asia from Vietnam base.

JFE Steel could decide participation in JSW Steel’s integrated project as early as in first half of 2012. JFE Steel also continues studies for separated integrated steel projects in Vietnam, Thailand and Philippines. The firm, which has 15% share in JSW Steel of India and 4% share in AK Steel of USA, tries to realize own offshore upstream operation.

E United Group’s reroller, Yieh Phui Enterprise made 680,000 tonnes of products including picking steel, cold rolled steel and coated steel in 2011. The group’s stainless flat steel maker, Yieh United Steel (YUSCO) made around 600,000 tonnes of stainless steel.