Tata Steel Ltd's wholly owned subsidiary in Singapore, Tata Steel Global Holding Pte. Ltd., has signed a joint venture agreement with Vietnam's largest steel company, Vietnam Steel Corporation, and Vietnam Cement Industries Corporation to build a 4.5-million per annum capacaity steel complex in the Vung Ang Economic Zone in the Ha Tinh province in Vietnam.
The integrated steel plant will be built in three phases at a total estimated cost of $5 billion. While the ultimate capacity of the steel complex will be 4.5 million tonnes per year, the first phase of the complex will be a Cold Rolling Mill to be commissioned by end 2010.
According the agreement between the two compnies, Tata Steel will hold a majority 65-per cent stake in the joint venture and also acquire a 30-per cent stake in the Thach Khe Iron Ore Joint Stock Company, which would undertake mining in the Thach Khe iron ore mine for the steel complex.
Vietnam Steel, Vietnam's largest steel company, is taking a 30-per cent stake and Vicem will hold 5 per cent in the project.
''This partnership is well placed to make the most of the tremendous growth potential Vietnam possesses," said Muthuraman. "On our part, we remain committed to bring high standards of corporate governance, environment protection, and a strong culture of striving for excellence."
Tata Steel managing director B Muthuraman and Vietnam Steel Corporation president Tau Van Hung had signed an MoU in Hanoi for the project in May last year. Following a detailed feasibility study the two companies signed definitive agreements in July 2007.
Hung said, ''The JV will enable Vietnam Steel to expand and create a substantial knowledge and technical base, while building a long-term relationship with Tata Steel. Setting up of an integrated steel plant will enhance Vietnam's status in the steel industry, and maximise the value of Vietnam's natural resources while strengthening our national economy and increasing job opportunities.''
Tata Steel already has a joint venture with Vietnam Steel in rolling mills through Singapore-based Natsteel amd with this joint venture, Tata Steel has formed four JVs this year so far.
Echoing the same sentiments, Nguyen Ngoc Anh, general director Vietnam Cement, said, ''Vicem is honoured to have this unique opportunity to establish a JV with Tata Steel and Vietnam Steel and trust that this venture will add momentum to the economic progress of our country, and go a long way in addressing the country's demand for self- sufficiency in steel.''
Vietnam Steel Corporation was formed in 1995 through the merger of Vietnam Metal Corporation and Steel Corporation and is the largest company in the country with a total steelmaking capacity, including that of its joint ventures, of around 5 million tons with wide range of product mix from crude steel, high quality construction steel to sheet and plate products serving other economic sectors.
In addition, it also has businesses in other areas such as mining, real state and sea ports.
Established in 1907 by J N Tata, Tata Steel is the flagship company of Tata Group, and has been rated as the world's best steel company for the past three consecutive years by World Steel Dynamics. Tata Steel currently has a capacity of around 30 million tonnes per annum and has the second largest global distribution network in 45 countries.
In June 2008 Tata Steel Ltd and its wholly owned subsidiary, Rawmet Ferrous Industries Ltd formed a joint venture with Jasper Industries Ltd to set up a coal based power plant of 2 X 67.5 MW capacity in Orissa.
The company also plans to develop coal blocks through a 50:50 joint venture with Steel Authority of India Ltd for coal mining in India, for their captive consumption. Earlier in January the steel maker had entered in to a joint venture agreement with the Oman-based Al Bahja Group, to develop the Uyun limestone deposits at Salalah in Oman.