Sahaviriya iron and steel to build furnace

Hot-rolled steelmaker Sahaviriya Iron and Steel (SIS) plans to build an upstream steel blast furnace in the very near future.

The move is a bid to remain competitive within the region following Vietnam's announcement on Sunday that it would construct its largest steel blast furnace.

"Once we receive an environmental-impact assessment and win tax incentives from the Board of Investment (BoI), we will start our investment immediately," said acting president Win Viriyaprapaikit. "The longer we postpone our investment project, the less competitiveness we'll have in the future after Vietnam completes its largest steel blast furnace."

 The Vietnam Economic Times reported the Vietnamese government on Sunday laid down the foundation stone for the country's largest smelting plant, which will cost US$7.9 billion (Bt266 billion).

Taiwanese-based Formosa Heavy Industry owns 95 per cent of the project and Sun Steel the rest. The cost also includes construction of a deep-sea port in the Central region's Ha Tinh province.

The project will take three years to complete and when finished will have a production capacity of Bt7.5 million tonnes a year.

Win said the Thai government and public authorities should understand the need for the Kingdom to establish an upstream steel blast furnace to reduce steel imports, worth Bt400 billion a year, as well as to secure the raw materials used in making steel.

SIS should take advantage of the fact that the top four steel companies have submitted letters of interest in setting up smelting plants in accordance with BoI criteria.

"These four companies cannot draft specific plans, because they still must wait to see the government's policy regarding the Southern Seaboard and BoI privileges. Hence, the sooner we operate our smelting plant, the more competitive we will be," Win said.

Earlier, SIS received BoI approval for the project, but the company failed to start it, because of financial problems and strong resistance from the local community.

However, SIS has become the leader in a consortium with Sino-International Heavy Industry Technology, the project's turnkey service provider.

In addition, it is negotiating with Chinese commercial banks and the Export-Import Bank of China for Bt50 billion worth of loans for its first phase, which will have a production capacity of 5 million tonnes a year.

Win insisted the company had already established a clear understanding with local residents, so it was confident it would not face local resistance this time.