The Steel (Mill) Age?

VietNamNet Bridge – More and more investors are queuing to get permission to invest in steel projects. However, not many projects have been licenced so far.Rushing to apply for steel mill projects…In August 2007, Korea’s Posco will start the construction of a steel mill in Phu My II Industrial Zone (IZ) in the south, capitalised at $1.128bil. The project was granted an investment licence in November 2006.

Prior to that, a $1bil project invested in by Thailand-based Tycoons Steel International, a subsidiary of Taiwan’s Tycoons Group International, located in Dung Quat Economic Zone (central province of Quang Ngai), was licenced in September 2006.A series of steel projects are awaiting appraisal from relevant ministries. These include 1. the joint venture steel company between Indian Essar and the Vietnam Steel Corporation in Ba Ria-Vung Tau ($527mil in investment capital, and 2mil tonnes/year in capacity); 2. the $1bil project suggested by Sun Steel and Taiwanese E-United Group in Ong Keo IZ in Dong Nai province; 3. the 4.5mil tonnes/year Thach Khe steel complex.Moreover, the construction of a lot of small-scale steel projects, capitalised at between $30-60mil, is to be started in Phu My II IZ. These include ones run by Taiwan’s Tong Hwei, specialising in making ingot steel, and 100% domestic owned Hoa Sen Joint Stock Company, specialising in making steel and construction materials.Meanwhile, a lot of steel mills which witnessed ground breaking ceremonies recently are now due to begin operating. In April 2007, the 180,000 tonnes/year Hoa Sen cold rolled steel mill was put into operation in Song Than 2 IZ in Binh Duong province.The Phu My steel mill invested in by Pomina Company in Phu My IZ is scheduled to be operational on the trial basis in July 2007 before it is put into official operation two months later. … but licensed projects slow in implementationWhile investors are racing against time to obtain investment licences, licenced projects have been very slow in implementation.Posco has been allocated 130 ha of land at Phu My II IZ for the site of the steel project, which will help the investor to kick off the project in August as previously scheduled. However, other investors seem to be not so lucky.Most of the steel projects which were licenced last year have not made much progress, including the well-known Tycoon’s.According to Tran Trung, Deputy Head of the Dung Quat IZ Management Board, Tycoons could not start the construction in May as planned due to uncompleted site clearance.“We planned to allocate 233 ha of land to Tycoons in the first phase, but to date, only 150 ha of land are ready,” he said. Meanwhile, the project on the Thien Hung stainless steel mill in My Xuan A IZ in Ba Ria-Vung Tau, which was licenced two years ago, remains on paper.“The investor is facing financial difficulties. Besides, it has to make a report on the impact of the steel mill on the environment, so it has asked to delay the project implementation until April 2008,” Le Minh Chau, Head of the Ba Ria-Vung Tau IZ Management Board, said.Impact on environment, a big question“State management authorities need to thoroughly examine the steel projects, to find out which products will be churned out, which technologies will be used, and most importantly, to find out if the projects will have any bad impacts on the environment,” said Nguyen Tien Nghi, Deputy Chairman of the Vietnam Steel Association.According to Mr Nghi, Vietnam’s steel industry just can make construction steel (rolled and bar steel), while highly technical steel products (flat, plate, sheet) still cannot be produced domestically, and need to be fed with imports.What worries experts and State management authorities most is the quality of technologies and equipments of the projects.“If Vietnam does not make thorough examination of the project’s technologies, it would have to bear very bad consequences in the environment,” Nguyen Manh Quan, Director of the Mechanics, Metallurgy and Chemistry Department under the Ministry of Industry.“There are more and more steel projects which have ‘problems’ with technologies,” Mr Quan said.(Source: Tuoi tre)