Tata Steel expects Vietnam licence in 3 months

News - Tata Steel, which signed a joint venture agreement with Vietnam’s largest steel company, Vietnam Steel Corporation (VSC) together with Vietnam Cement Industries Corporation (Vicem) for a 4.6 million tonne per annum (mtpa) integrated steel plant, says it is expecting Vietnamese government investment licence in the next three months.

Vietnam has a practice of putting down all the expenditure to be incurred on the project on various accounts like the steel plant and the cold rolling mill comprehensively on the investment licence. “We are expecting the investment licence in the next three months,” Tata Steel managing director (India and South East Asia) HM Nerurkar said.

Discussions between the Vietnamese government and officials of Ha Tinh province, where the steel complex is to be set up in the Vung Ang Economic Zone, are on, the managing director said.

The integrated steel plant is to come up in three phases, spread over a 10-year period, at a total estimated cost of $5 billion. While Tata Steel will have a 65% stake in the steel project, VSC and Vicem would have 30% and 5% stakes, respectively, in the project.

Tata Steel would also have a 30% stake in the Thach Khe Iron Ore Joint Stock Company, which would undertake mining operations in the Thach Khe iron ore mines.

Talking about the company’s South-East Asian operations, Nerurkar said Singapore-based NatSteel Holdings was “doing well” as its Ebitda was the “best” among those following a similar steel-making process in the region with its products being sold, apart from in Singapore itself, in Australia, China, Vietnam, the Philippines, etc.

“As long as South East Asia, which is the growing part of the world, keeps growing—and we are part of the scene (through NatSteel Holdings)—we should grow,” said Nerurkar. According to him, after witnessing political uncertainty till recently, things had improved substantially in Thailand, as a result of which Tata Steel Thailand would be performing well “from this quarter” onwards.

The company has made fresh investments of $120 million in the Thailand unit in 2009-10 which has gone into installing a mini blast furnace complex to improve the quality of its high carbon steel products.

“We are also improving our product mix in Thailand, which should improve our performance further," said Nerurkar.