Japan’s JFE Steel mulls $242m investment in Vietnam-based Formosa Plastic project

Visual from the JFE steel website, July 2015

Japanese firm JFE Steel Corp, the world’s ninth-largest steel maker by output, is likely to invest 30 billion Yen ($242 million), to acquire a five per cent stake in a steel complex in Vietnam, according to a report in the Nikkei business daily.

The steel complex project has been developed by Taiwan’s Formosa Plastics in central Ha Tinh province, Vietnam and is based in the Vung Ang Economic Zone.

The two parties are expected to seal the deal as early as next month.

Eiji Hayashida, president of the steelmaker’s parent company, JFE Holdings, had earlier told Reuters that the company would decide whether to invest in the Vietnamese project by the end of the summer. Meanwhile, a JFE Steel spokesman, who called the Nikkei report “speculation”, said nothing has been decided yet.

The project that has garnered a total investment of approximately $10 billion, is expected to start operation by next spring, with an initial capacity of seven million tonnes of crude steel per year.

Formosa Plastics is learnt to have planned another $10 billion investment for secondary construction for increasing plant’s annual capacity to 22 million tonnes. The Japanese partner, reportedly, will consider additional investment in the expansion.

Last year, JFE Steel dropped its intention to build an integrated steel mill in Vietnam due to the global supply excess. By acquiring five per cent in the Vietnam-based complex, the company will be able to strengthen its global network. This is in line with a three-year business scheme launched in April, to pour 200 billion Yen overseas to drive growth, as domestic demand in Japan goes down.

Last week, Vietnam has seen an expanded construction for the Vina Kyoei steel plant in the southern province of Ba Ria-Vung Tau.

Vina Kyoei, a joint venture between three major Japanese companies in the sector – Kyoei Steel Ltd, Mitsui Steel and Marubeni – Itochu Inc – and the Vietnam Steel Corporation, has a capacity of around 500,000 tonnes of processed steel for construction, per year. The expansion is likely to double the firm’s production.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.