Steelorbis Shanghai
Located over 400 kilometers from the capital Hanoi in the south, the district of Ky Anh in the province of Ha Tinh is one of the poorest areas in Vietnam. Though the region contains iron ore reserves of nearly 500 million mt, it has been left to one side by many leading steel producing giants, like India's Tata Group and South Korea's POSCO, due to its poor infrastructure: there is an eight-hour drive to the nearest city Hanoi, and 100 km to the nearest airport. Here, oxcarts and carriages can be seen everywhere, while transportation with large-scale machinery is very difficult. The only way to improve transportation in the area is to make a huge investment in building a deepwater wharf and at least one railway.
However, the abovementioned shortfalls are advantages in the eyes of Taiwan-based Formosa Plastics Corporation (FPC), which has determined to invest $17 billion in the construction of a new steel plant here. The new project will be divided into three phases, aiming at a total capacity of 30 million mt, on a site covering an area of 2,000 hectares. FPC will hold a 95 percent stake in the project, while Taiwan Sunsteel Corporation will hold the remaining five percent of shares. FPC has promised that the new plant will introduce the most advanced iron-making, steelmaking and rolling techniques and equipment. The first-phase project, expected to completed by 2011, will involve an investment of $8 billion, with a designed capacity of 7.5 million mt.
Meanwhile, FPC will invest in the construction of a 300,000 dwt deepwater port, which is expected to rank among the top 20 ports in the world in terms of throughput.
Thanks to its economic development since the 1990s, Vietnam's demand for steel has gone up greatly. For the purpose of meeting demand, Vietnam has to import a great quantity of steel from overseas countries like China every year. As China has been implementing macro-control measures in regard to its steel industry and has been greatly raising its export tariffs for steel products since 2007, Vietnam's import prices for semis have already gone up to $1,100/mt.