POSCO’s $623 Million Steel Plant Investments in Vietnam and Mexico

---

Researched by Industrial Info Resources (Sugar Land, Texas). POSCO (NYSE:PKX) (Pohang, South Korea), Korea’s global major steelmaker, is making moves in a sector that continues to see international networks building through acquisition, project investments and cooperative agreements. The company’s board of directors has announced investments totaling $623 million to build a steel plant in Vietnam and a galvanizing line in Mexico.

The $361 million cold rolled steel plant in southern Vietnam will be sited at Vung Tau near Ho Chi Minh City and will have a production capacity of 700,000 tons per annum. The plant will start commercial operation in late 2009 or early 2010 and the cold rolled coil output will be supplied for the manufacturing of commercial vehicles, motorbikes and steel products used in construction. POSCO is planning to use hot rolled coil from its new integrated mill in India to feed the Vietnamese operation in its initial phase. There are plans in place to more than double the output of the plant to 1.5 million tons per annum after 2009. POSCO is also panning to build a 3 million tpa hot rolled steel mill in Japan after 2009.

The $262 million investment in the continuous galvanizing line in Mexico will be made in partnership with Japan’s Nippon Steel Group (OTC:NISTF) (Tokyo, Japan). The plant will start processing 400,000 tons of steel sheets to supply the auto manufacturing industry in the southeastern U.S. where general Motors, Nissan, Hyundai and Mercedes – Benz produce over 2 million cars per annum.

The Korean company is building the relationship with Nippon Steel following the Mittal/Arcelor merger and the growing export competition from the Chinese. The Korea Herald reports that the two companies have agreed to supply steel slabs for each other when they repair furnaces between 2007 and 2011. Cross shareholdings will increase with Nippon buying a 2% stake in POSCO to add to the 3.32 % it currently holds. The Korean company plans to acquire shares in Nippon to the same value. Another agreement will see the two companies cooperating at a technological level to build facilities for recycling iron and steel by-products.

View Project Report - 65000643

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.