CSC Plans to Purchase Hot Coil from Formosa’s Steel Plant in Vietnam

Mr. Jo-Chi Tsou, chairman of China Steel (CSC), Taiwan, revealed the firm eyes hot coil procurement from Formosa Plastic’s integrated steel plant in Vietnam. CSC constructs a new cold rolling mill in Vietnam jointly with Sumitomo Metal Industries, which is scheduled to start operation in early 2013. Formosa Plastic is Taiwanese petrochemical maker, planning to establish an integrated steel plant in Vietnam. CSC aims to procure hot coil from Sumitomo Metals and the local supply source for higher competitiveness in expanding Southeast Asian steel market.

Formosa plans to construct an integrated steel plant with capacity at 13 million tonnes per year in Vietnam. Formosa will take 5% shares in CSC’s Vietnamese cold rolling mill while CSC will also invest in Formosa. Mr. Tsou said Formosa and CSC have promoted close communications as good partners. Cold rolling mill’s capacity is planned at 1.5 million tonnes per year. CSC and Sumitomo Metals’ Kashima iron works will supply hot coil to the cold rolling mill while CSC seeks local hot coil procurement due to cost competitiveness and import duty.

Mr. Tsou said CSC will complete no.2 blast furnace of Dragon Steel, CSC’s subsidiary, and Vietnamese cold rolling mill at the end of 2012 and start operations in early 2013 as scheduled. CSC simultaneously promotes plant construction, facility introduction and staff training in order to start the operations at earliest. CSC will expand upstream capacity in Taiwan and builds up downstream capacity at overseas.

Dragon Steel started the operation of no.1 blast furnace in February 2010 and a hot rolling mill at the end of April. CSC plans to increase the crude steel capacity to 6 million tonnes per year by running of Dragon’s no.2 blast furnace and to raise total capacity of CSC’s group to 17 million tonnes. CSC aims to expand the sales of steel sheet to China or Southeast Asia by the enhancement of upstream and downstream.