Japan’s largest rebar producer, Kyoei Steel announced this week that it had cancelled the expansion plan of Vietnamese arm Kyoei Steel Vietnam Co. Ltd. (KSVC) situated in country’s northern province of Ninh Binh.
KSVC was established in the year 2011 by Kyoei Steel and the company started its operations in March 2012 with the designed production capacity of 500,000 tonnes per year. At present Kyoei Steel holds 60% in KSVC, Metal One Corporation has 20%, and Marubeni-Itochu Steel Inc. 40%.
The cancelled plan at KSVC was to add a 500,000 tonnes per year rebar and wire rod rolling mill and a 500,000 tonnes per year steelmaking plant.
This decision came after Kyoei Steel recently decided to increase its stake in Vietnam Italy Joint Stock Company or VIS from 20% to 65% making VIS its subsidiary. VIS is located in Vietnam’s Hung Yen province and has total steelmaking capacity of 450,000 tonnes and rebar plus wire rod capacity of 300,000 tonnes. VIS was established in 2001 by Song Da Corporation. The corporation later decided to divest all of its 26.1 million shares from VIS and in Nov’17, Kyoei Steel acquired 20% stake in VIS.
Reports suggest that the rebar produced by VIS is mainly supplied to the industrial sector while KSVC rebar supply goes mainly to the housing sector. According to VIS directors, the Vietnamese construction sector will see an increase of 9.7% this year and reach an average growth of 8.2% in 2017-2021.
As reported a company official from VIS said that the company will be able to expand its business through VIS as it will be able to start supplying rebar for Japan’s ODA (Official Development Assistance) projects through it. So canceling the expansion project at KSVC is not negative, but Kyoei Steel is rather boosting its business in Vietnam.
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