Jeong An Vina has new shareholders

JFE Steel Corporation, Maruichi Steel Tube Ltd. and Toyota Tsusho Corporation would spend about 18 billion won (1.3 billion yen) to buy Jeong An Vina Co., Ltd from Jeong An Steel Co., Ltd.

Jeong An Vina, a wholly owned subsidiary of Jeong An Steel, has an annual production capacity of 50,000 tonnes and recorded sales of $10.9 million in 2009. The southern Dong Nai province-based plant was established by Hyundai Steel Pipe Co., Ltd. in 1995. Huyndai then assigned its capital in the Vietnamese company to Jeong An Steel in 2004.

According to the Japanese investors, they would change the company's name following the acquisition, while JFE Steel would provide the president and Toyota Tsusho provide the executive vice president.

JFE Steel is a unit of JFE Holdings  and Toyota Tsusho is a trading firm affiliated with Toyota Motor Corp specialising in metals, machinery and autos.

Jeong An Vina is capitalised at $3.1 million, including 35 per cent of shares held by JFE Steel, 35 per cent by the Maruichi Steel Tube group and 30 per cent by Toyota Tsusho.

The Maruichi group's share will comprise a 30 per cent share held by Maruichi Steel Tube Ltd. and 5 per cent by Sun Steel Joint Stock Company (Sunsco), which is a joint venture established by Maruichi Steel Tube, Toyota Tsusho, JFE Steel and others.

According to Sunsco's vice general director K.Masumoto, the company boasted $130 million in charter capital, in which Maruichi Steel Tube Ltd. holds 64.3 per cent, Toyota Tsusho Corporation 9.73 per cent and JFE Steel Corporation 8 per cent.

The newly acquired company will manufacture high-quality steel pipe pile, steel pipe sheet pile and water pipe by combining existing facilities for spiral steel pipe manufacturing and coating with JFE Steel technology.

The Japanese investors intend to capture the strong demand for steel pipe, as well as explore new demand, in Vietnam's construction steel market.

It will also work closely with Sunsco, which began operating a 16-inch medium-diameter welded pipe mill in May, 2010 in southern Vietnam and another steel pipe plant in Hanoi in September, 2010.

The Japanese investors expect to raise the company's overseas shipments by five times from the current 10,000 tonnes.

They will begin supplying products from the new acquired company soon after obtaining local government's approval and licences. The move will allow the venture to meet the increasing demand for construction steel pipe in Vietnam, particularly with a wave of newly launched projects for ports, railways and other major infrastructure projects being launched.

According to the Japanese investors, they have been jointly considering the best possible manufacturing structure for the Vietnamese market.

The country's overall steel consumption in the first 10 months of the year reached 3.87 million tonnes, up 18 per cent from last year's corresponding time.