Firm’s steely resolve

Representatives from Export-Import Bank of China last week visited Vietnam, at E-United Group’s invitation, to confirm the bank would provide funding to the central Quang Ngai province Dung Quat Economic Zone-based steel factory, in which the Taiwanese will hold a 90 per cent stake.

The investor and bank delivered the message to the Quang Ngai People’s Committee, Ministry of Industry and Trade and Ministry of Planning and Investment.

Guang Lian is the largest of 40 projects the Chinese banker has funded in Vietnam.

Cao Khoa, chairman of Quang Ngai People’s Committee, said the credit confirmation “eased worries the local authority had about this project.”

Till now, the local authority has not granted an amended investment certificate to the project, even though the government approved the investor’s proposal for investment expansion from $3 billion to $4.5 billion.

Khoa said provincial leaders had wanted to see the investor’s strong commitment and financial ability before granting an amended investment certificate.

“Our requirement was that E-United Group leaders had to introduce bankers who agreed to fund this giant steel manufacturing project. Finally, they did,” he said.

Khoa added the local authority would grant an amended investment certificate to this project, allowing E-United Group and its partner Thailand’s Tycoons Worldwide Group – which holds the remaining 10 per cent stake – to resume construction.

Guang Lian is the second largest steel project to have been licenced in Vietnam, following mammoth port and steel manufacturing complex of Taiwan’s Formosa Plastics Group in Vung Ang Economic Zone, central Ha Tinh province.

Guang Lian, first invested in by Thailand’s Tycoons Worldwide Group and Chinese Jian Steel and Iron Group, was licenced in 2006 with total investment capital of around $1 billion.

One year later, Taiwan’s E-United Group replaced Jian Steel and Iron Group and took a 90 per cent stake in the project, establishing Guang Lian Steel Company. It also raised the investment capital to $3 billion, but has delayed construction. Last year, the new investor asked for permission to raise total investment capital to $4.5 billion and total annual production capacity to seven million tonnes of steel.