New JV steel sheet plant to serve Thai demand first

Corporate April 09, 2013 00:00

By Onravee Tangmeesang

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The Bt3-billion steel-sheet plant planned for Prachin Buri by Vietnam's Hoa Sen Group and two Thai partners will serve the domestic market first then export to the other nine Asean countries.


“The new factory should be completed before 2015,” Phatchada Sirakaran, managing director of BK Metal Sheet, said yesterday.
This month Hoa Sen Group, Vietnam’s leading steel-sheet and steel-pipe manufacturer and trader, signed a trademark-licensing agreement with Assava Metal (Thailand) and an agreement on investment cooperation in building a steel-sheet plant in Thailand with Assava Metal and BK Metal Sheet. 
Pracha Assavaniwest, managing director of Assava Metal (Thailand), said the plant would have a capacity of 120,000 tonnes per year. The survey of the plant’s site, which is likely to be in Prachin Buri’s Kabin Buri district in the province, has already begun. When construction begins, it will take about 24 months to finish. 
The 51:49 joint venture will have Hoa Sen on one side and Assava Metal Thailand and BK Metal Sheet on the other, but they have yet to finalise which side will hold the 51-per-cent stake. 
The move comes as both Thai companies prepare for the full realisation of the Asean Economic Community in 2015. 
It also aims to cope with the high demand for a variety of steel-sheet and steel-pipe products by the construction industry in Thailand.
Another positive factor is that the Thai government has announced anti-dumping measures on steel sheet from three origins – mainland China, South Korea and Taiwan. That will drive up prices of imported products. 
“Thailand needs to use about 60,000 tonnes per month of steel, but supply is only 25,000 tonnes, which is not enough,” Pracha said.
Assava Metal has been importing more than 10,000 tonnes of steel sheet from many factories in Vietnam and will continue to do so despite the plan to set up its first steel-sheet plant in Thailand under the joint venture. 

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