Tata Steel enters JV with Vietnamese cos. to set up $5 billion steel plant

Tata Steel, along with Vietnam's largest steel company, Vietnam Steel Corporation (VN Steel) and Vietnam Cement Industries Corporation (VICEM) signed the JV agreement to set up a 4.5 million tonnes per annum (MTPA) steel complex in the Vung Ang Economic Zone in Ha Tinh province.

While Tata Steel, through its wholly owned subsidiary in Singapore, Tata Steel Global Holding Pte Ltd, will have 65 percent stake in the JV, VN Steel and VICEM will hold 30 percent and 5 percent respectively.

The complex is expected to create jobs for 20,000 people when complete, a Tata official said. The JV would also enable Tata Steel to extend an equity contribution of 30 percent in Thach Khe Iron Ore mining project, the official added.

"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," Tata Steel said in a statement.

"We are delighted to enter into the joint venture with VN Steel and VICEM, and believe that this partnership is well placed to make the most of the tremendous growth potential Vietnam possesses. Together, we look forward to seeing this country grow and prosper. We are excited to be a part of this landmark project that is slated to bring sustainable and long-term value to our companies and customers, and accelerate the development of Vietnam. On our part, we remain committed to bring high standards of corporate governance, environment protection, and a strong culture of striving for excellence. We also highly appreciate the support we have got from the Government of Vietnam and the leaders of Ha Tinh province proving once again that Vietnam is a cherished destination for serious foreign investors," B. Muthuraman, managing director, Tata Steel, said.