JFE Steel, Maruichi Steel Tube to Buy Spiral Pipe Plant in Vietnam

JFE Steel, Maruichi Steel Tube and Toyota Tsusho Corporation announced on Monday they will acquire all share in Vietnamese spiral steel pipe maker, Jeong An Vina for around 18 billion won from the parent company of Jeong An Steel of South Korea. They try to enter steel pipe pile and steel pipe sheet pile business in Vietnam through the acquisition.

They will purchase the share in December. JFE Steel will have 35% share in the company while Maruichi Steel Tube group has 35% and Toyota Tsusho Corporation has 30%. After the acquisition, the company will change the name. JFE Steel will send the president and Toyota Tsusho Corporation will send the vice president.

Jeong An Vina, which was established by Hyundai Steel Pipe in 1995, was acquired by Jeong An Steel in 2004. Jeong An Vina with US$ 3.1 million of capital posted US$ 10.9 of sales in 2009. The firm has annual 50,000 tonnes of spiral pipe making capacity at the plant and provides pipe with 16-100 inches of diameter. The firm now makes annualized 10,000 tonnes of products. JFE Steel will provide the material hot band for the Vietnamese plant.

JFE Steel will make high grade steel pipe pile, steel pipe sheet pile and water supply pipe at the existing plant in Vietnam. Maruichi Steel Tube seeks synergy with the Vietnamese galvanizing stele making subsidiary, Sun Steel Joint Stock Company (SUNSCO), which makes steel pipe with up to 16 inches of diameter at the Hanoi plant and steel pipe with 2 and 3 inches diameters. Toyota Tsusho Corporation will support the acquired company’s marketing.

JFE Steel’s senior vice president Tsutomu Yuba said at press conference on Monday Vietnamese spiral pipe demand is estimated to be annual 20,000-30,000 tonnes and will reach 100,000 tonnes in years when the demand will grow for major infrastructure projects including rail way and port construction.