Maruichi Steel Tube to Build No.2 Galvanizing Line in Vietnam

Maruichi Steel Tube plans to build No.2 hot-dip galvanizing line at the Vietnamese pipe and flat steel making subsidiary, Sun Steel Joint Stock Company (SUNSCO) to double the capacity to meet growing demand at home and abroad. Maruichi Steel Tube tries to start the around US$ 90 million expansion work in the year. The firm also eyes additional color coating line. The president Hiroyuki Suzuki said the production will increase to 1.5 times at annual 300,000 tonnes after the expansion while the operation rate increases for new 16 inches pipe mill and Hanoi plant. The firm seeks growth through the larger capacity in strategic operation in Southeast Asia.

The subsidiary operates existing lines at full capacity both for No.1 galvanizing line with annual 150,000 tonnes of output capacity and color coating line with 50,000 tonnes of capacity. The firm supplies the products mainly for construction market. Vietnamese steel consumption exceeded 10 million tonnes in 2010 under the rapid economy growth. The country increases the steel export, which represents already near half of the flat steel production, under growth in Asian countries.

Maruichi Steel Tube decides the expansion in April to complete in 2013. The new galvanizing line with same level of annual output capacity as No.1 line will provide thicker sheet for pipe operation. The firm expects the expansion can maximize the through put due to the lower operation rate for the existing pickling line with 500,000 tonnes of annual output capacity and cold rolling mill with 250,000 tonnes of capacity.

The subsidiary plans to make around 200,000 tonnes of steel products in 2011, which is 16% higher than 2010 level. The firm launched new 16 inches pipe mill in May 2010 and new Hanoi plant in August 2010. The firm has now better relationship with JFE Steel after JFE Steel got 8% share in SUNSCO in February 2010. SUNSCO can secure material hot band stably for output increase.

SUNSCO expects the new 16 inches pipe mill can get certification for pipe products with American Petroleum Institute (API) in March. The firm expects with API certification, the firm can increase the sales for energy industry in US and world market while the firm now exports the products mainly to US market. The firm also develops Vietnamese market with aggressive infrastructure investment.

The new Hanoi plant has 2 small pipe making lines with annual 36,000 tonnes of output capacity. The plant increases the operation rate mainly for motorcycle applications while the plant tries to get products approvals from the users.

SUNSCO was established as pipe plant by Toyota Tsusho Corporation and Taiwanese company group in 1996. Maruichi Steel Tube joined SUNSCO in 2006 and increased the share to largest shareholding in 2008.