Ferrostaal to build two plants in South Africa

Ferrostaal to build two plants in South Africa

Germany's Ferrostaal will build a stainless steel precision strip mill at Coega and an oil rig manufacturing plant at Saldanha Bay, both in South Africa. The projects are part of the company's obligations under a defense program: Ferrostaal will build the plants and South Africa will by arms from Germany. Ferrostaal will invest €80 million ($96 million) for the first phase of the stainless steel precision strip mill and €120 million ($144 million) for the second phase. Furthermore, the company will spend $30 million to build an oil rig manufacturing plant. The steel required for the rigs will be provided from Mittal Steel's Vanderbijlpark plant. Mittal Steel may need to increase its production capacity there. Both projects are expected to get under way in March 2006.