Nippon Steel to Join POSCO’s Cold Rolling Project in Vietnam

Nippon Steel and POSCO announced on Tuesday they agreed to start study possible Nippon Steel’s participation in POSCO’s new cold rolling mill project in Vietnam. They keep talk for Nippon Steel’s 10-20% of partial share holding in the project. They expand the joint project into Vietnam as the strategic alliance after they operate Thai cold rolling plant jointly. They try to expand the synergy with merit for both companies after agreement for further tie-up 2 years ago when they expand offshore investment and offshore business.

POSCO has plan to build hot rolling mill and hot dip galvanizing line at the Vietnamese cold rolling mill site while the firm eyes annual 5 million tonnes of integrated steel plant with blast furnace or new iron making process, FINEX. Nippon Steel and POSCO agreed for potential participation only in the cold rolling project while Nippon Steel eyes possibility of future participation in POSCO’s other projects in Vietnam depending on conditions.

POSCO established wholly owned POSCO-Vietnam in November 2006 for US$ 528 million of cold rolling project. The firm builds new plant with annual 1.2 million tonnes of cold rolling mill and 700,000 tonnes of continuous annealing line to launch the operation in September 2009.

Vietnamese steel demand is expected to grow from current 10 million tonnes per year. The country import 1 million tonnes out of 1.4 million tonnes of cold rolled flat steel demand. The application is expected to expand to automobile and other areas from current motorcycle and construction.

Nippon Steel and POSCO started the strategic alliance in 2000 and extended the alliance 5 more years in 2005 after they confirmed the synergy including joint development and technical exchange. They agreed for further cooperation in 2006 including 55 billion yen of additional cross shareholding and realized semi-finished steel supply during blast furnace relining, iron ore joint negotiation and dust recycling joint venture.