Kyoei Steel to Expand Offshore Sales to Match Domestic Sales

Kyoei Steel’s president Koji Morita said the firm’s offshore sales rate would increase to around 50% of total sales in and after 2014 from current 20% based on annual 2 million tonnes of steel production. He said at press conference on Wednesday the offshore sales will increase when the firm will increase steel output to 1.5-1.7 million tonnes in Vietnam.

The firm announced on Wednesday the firm launches new joint venture, Kyoei Steel Vietnam (KSVC) to succeed business of local concrete reinforcing steel bar maker, Tam Diep Rolling Mill Company located in Ninh Binh, northern Vietnam.

Kyoei Steel plans 200,000-300,000 tonnes of rebar output at KSVC in 2012. KSVC starts construction of new production line with annual 500,000 tonnes of steel making and rolling capacity for US$ 200 million to launch operation in 2014. Kyoei Steel studies the demand eyeing capacity to make rebar with maximum 51 millimeters diameter while the large size is supplied only by Kyoei Steel’s existing rebar rolling subsidiary, Vina Kyoei Steel (VKS) in the country. KSVC makes rebar with maximum 41 mm diameter.

Kyoei Steel will have annual 1.7 million tonnes of rebar production capacity in Vietnam including new production line with 500,000 tonnes at VKS. Kyoei Steel expects the group’s market share is around 13% in the country compared with current 8% by VKS. The firm expects Vietnamese rebar demand would increase to more than 10 million tonnes by 2020 while the demand decreased by 600,000 tonnes to 5.7 million tonnes in 2011 from 2010 due to slow construction activity.

Kyoei Steel’s chairman Hideichiro Takashima said at the press conference Kyoei Steel will seek chance for potential offshore business. He emphasized the firm’s leading offshore business in Japanese electric furnace steel makers when the firm launched offshore business around 50 years ago and the firm had controlled US electric furnace steel makers.