Japanese steelmaker JFE Steel Corporation, Maruichi Steel Tube Ltd. and Toyota Tsusho Corporation have recently announced that they will wholly acquire a Vietnamese spiral steel pipe manufacturer, Jeong An Vina Co., Ltd., for about 18 billion won (about $15.9 million) from South Korean Jeong An Steel Co., Ltd., under a plan to directly manufacture and sell steel pipe pile and steel pipe sheet pile in Vietnam.
Jeong An Vina, currently a wholly owned subsidiary of Jeong An Steel, has an annual production capacity of 50,000 mt and recorded sales of $10.9 million in 2009. It was established by Hyundai Steel Pipe Co., Ltd. in 1995 and is based in Long Thanh, Dong Nai Province.
Following the acquisition, the company's name will be changed. JFE Steel will provide the president and Toyota Tsusho will provide the executive vice president.
Jeong An Vina will be capitalized at $3.1 million, shared 35 percent by JFE Steel, 35 percent by the Maruichi Steel Tube group and 30 percent by Toyota Tsusho. The Maruichi group's share will comprise a 30 percent share held by Maruichi Steel Tube Ltd. and five percent held by Sun Steel Joint Stock Company (SUNSCO). SUNSCO, a joint venture company established by Maruichi Steel Tube, Toyota Tsusho, JFE Steel and others, processes galvanized steel sheet and steel pipe in Binh Duong Province.
The newly acquired company will manufacture high-quality steel pipe pile, steel pipe sheet pile and water pipe by combining existing facilities for spiral steel pipe manufacturing and coating with manufacturing technologies from JFE Steel. The company intends to capture the strong demand for steel pipe, as well as explore new demand, in Vietnam's construction steel market, working closely with SUNSCO, which recently began operating a 16-inch medium-diameter welded pipe mill.
Following the acquisition, the company will begin supplying products under its new structure soon after obtaining necessary government approvals and licenses. It expects to raise shipments from 10,000 mt a year at present to 50,000 mt in the foreseeable future.
The demand for construction steel pipe is increasing rapidly, especially in Vietnam, due to a wave of newly launched projects for ports, railways and other major infrastructure.