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Tata Steel unit buys Vietnam's largest steel mills
By siliconindia
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Thursday, 08 March 2007, 18:30 IST
MUMBAI: Tata Steel has agreed to buy two of the biggest units of Vietnam Industrial Investments Ltd., SSE Steel Ltd and Vinausteel Ltd for $41 million (Rs182 crore). Persued by Natsteel Asia Pte, a unit of India's Tata Steel Ltd, the deal is expected to be closed by June 2007 according to company sources.
The steel-bar rolling plants, which have a combined capacity of 430,000 tonnes a year, will help the Tata plant to tap into Vietnam's economy that has more than doubled over the past decade, with annual growth exceeding seven percent since 2002. Its $53 billion economy is moving away from its agricultural roots as industry and construction now make up 41 percent of gross domestic product and services.
Steel usage in Vietnam may rise to 10 million tonnes by 2012, from 6 million tons, according to India's Essar Steel Ltd, which is planning a $527 million plant with two Vietnamese companies. "Southeast Asia is one of the fastest-growing markets for steel in the world and it makes sense to have a bigger share of the market there," said Hitesh Agrawal, an analyst at Mumbai- based Angel Broking Ltd. "It will continue to be a lucrative market for the foreseeable future"
"This acquisition is part of the company's strategy to establish itself as a strong player in the construction sector that is growing rapidly in Asia," Tata Steel Deputy Managing Director TK Mukherjee said.