Nippon Steel Leads Joint Venture for Construction of Mill in Vietnam

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Researched by Industrial Info Resources (Sugar Land, Texas)--The formation of Nippon Steel Pipe Vietnam Company Limited (NPV), a joint venture company of Nippon Steel Corporation (TYO:5401) (NSC) (Tokyo, Japan), was formally announced in July. NPV was created to carry out the management of NSC's planned grassroot Phu My steel pipe and sheet mill in Vietnam, construction of which is scheduled to commence in October. Companies involved in the joint venture are:

• NSC (51%)
• Metal One Corporation (Tokyo) (20%)
• Vietnam Steel Corporation (Hanoi, Vietnam) (10% )
• Sumitomo Corporation (TYO:8053) (Tokyo) (4.75%)
• Marubeni-Itochu Steel Incorporated (Tokyo) (4.75%)
• Hanwa Company Limited (TYO:8078) (Tokyo) (4.75%)
• Nippon Steel Trading Company (TYO:9810) (Tokyo) (4.75%)

The mill will be located in the Phu My II Industrial Zone, just west of Ho Chi Minh. Although construction is scheduled for later in the year, NSC is still searching for a developer. Once a developer has been selected, NSC will release requests for quotations (RFQs) and bid documents for subcontractors, equipment and consumables. The joint venture plans to construct housing on a 10,000-square-meter plot. All of the steel used will be provided by NSC's Japanese steel works.

NSC is seizing the opportunity to enter the steel industry during a construction boom in Souteast Asia. Vietnam in particular utilizes cement-based construction for the vast majority of projects and currently consumes approximately 60 million tons of cement per year. Though cement piles are used primarily in most projects, NSC anticipates a rise in demand for steel piles in the near future. The $31 million Phu My steel pipe and sheet mill will be NSC's first steel production facility constructed outside of Japan.

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