Essar Steel Vietnam Holdings Private Limited, Singapore (ESVHL), today signed a joint venture agreement with Vietnam Steel Corporation (VSC), and Vietnam General Rubber Corporation (GERUCO ) - both state owned companies to form a joint stock company. The JV has been christened Essar Vietnam Steel Corporation.
The JV Company will set up a Hot Strip Mill plant, and have an initial capacity of 2 million tonnes per annum of Hot Rolled Coils, Sheets and Skin Passed Coils. The project is estimated to cost US $ 527 million and is expected to be completed in 30 months. ESVHL will hold 65% equity, VSC will hold 20% equity and Vietnam General Rubber Corporation will hold the balance 15% equity in the JV.
The project will be located in Phu My Industrial Zone, Baria Vung Tau province in southern Vietnam. This province well connected by road and is in proximity to the proposed port.
Vietnam currently consumes 6 million tonnes of steel of which hot rolled coils is 2 million tonnes. The steel consumption is expected to go up to 10 million tonnes by 2012. In the absence of a Flat steel plant, Vietnam imports its entire requirement of Hot Rolled Coils. This project is expected to substitute imports of hot rolled coils into the country, saving valuable foreign exchange.