Vietnam-Japan steel venture officially opens
11/29/17 5:00 PM
Vietnam’s Mechanization Electrification Construction Corporation JSC (Agrimeco) and Japan’s JFE Steel Corporation (JFE) held an opening ceremony for the two companies’ newly merged unit, Agrimeco & JFE Steel Products Co., Ltd (ANJ) in Hanoi on November 28.
The new entity, ANJ, has a registered capital of US$2 million and is the first joint venture that JFE Steel Corporation has established with a construction and steel-processing company in Vietnam.
As of February 17, 2017, JFE announced the establishment of a joint venture with 50-50% shareholding in Agrimeco, a contractor engaged in hydroelectric power plants and steel high-rise buildings, as well as processing construction materials.
Le Van An, chairman of Agrimeco, explained that despite the successful merger in February, both sides needed time to understand each other’s working methods, and most importantly, to have ample preparation for upcoming international projects, hence the opening ceremony in November.
‘As we have now secured some major contracts with other companies outside of Vietnam, we plan to utilise each party’s core strength to build one of the largest mechanical complex here in Asia,’ he added.
The joint venture will focus on importing structural steel sheet and steel materials from Japan, which will then be processed by Agrimeco and exported to neighbouring South East Asian markets, after it has consolidated operations in Vietnam.
According to Fukushima Isao, general director of JFE Steel Vietnam Co., Ltd., in order to avoid competing with cheap Chinese steel, the new unit will focus on high-end anti-corrosion products.
Domestic demand for construction materials is expected to remain strong and stable as Vietnam continues actively expands its roads, railways, power plants and other transportation infrastructure, consuming 18 million tonnes of steel annually, Fukushima added.
He also said that the Vietnamese high-end construction steel market is expected to nearly triple by 2025, while integrated steel works and steel products consumption is expected to grow further.