Kyoei Steel has announced to complete the purchasing of 20 per cent stake in Vietnam-Italy Steel JSC (VIS) from Thai Hung Co., Ltd (Thai Hung), VIS’s biggest shareholder. After the VND480 billion (roughly US$21.17 million) transaction on November 3, 2017, Thai Hung still own 45 per cent stake in VIS.
VIS was established in 2001 by Song Da Corporation; however, this Corporation decided to divest all of its 26.1million shares from VIS which is currently managed by Thai Hung in 2015.
Thai Hung is a large distributor for many steel manufacturers such as VIS, Vietnam Steel Corporation, Posco, Pomina and Thai Nguyen Iron and Steel Corporation (TISCO).
VIS’s total designed capacity of the steel plant in Hung Yen and the steel billet plant in Hai Phong is about 650 thousand tons. Last year the company produced 260,000 tonnes of steel billets and nearly 300,000 tonnes of steel.
Currently, the company holds around 3.6 per cent of market share. It plans to develop new plants to reach the capacity of 850,000 tonnes of steel and 1.1 million tonnes of steel billet.
VIS’s revenue and after-tax profit in 2016 were VND3,739 billion (roughly US$164.9 million) and VND72 billion (roughly US$3.2 million) respectively. In the first nine months of this year, the company attained VND4,644 billion (roughly US$204.8 million) in revenue and VND67 billion (roughly US$2.95) of after-tax profit.
Lately, Kyoei Steel has also announced to restart a US$218 million steel project of which capacity was announced to be 500,000 tonnes of steel per year in Ninh Binh province. This project has been suspended since 2014.
Earlier, the Vina Kyoei joint venture between Kyoei Steel, Japan-based Marubeni- Itochu Steel and Vietnam Steel Corporation was established in 1994 with the capacity of 1.3 million tonnes of steel per year. This company currently accounts for 10 per cent of domestic market share.
Currently, Kyoei Steel only focuses on rolling steel in Vietnam with steel billets being purchased from other companies. However, billet prices are increasing due to the influence from the Chinese market. Being a shareholder in VIS and launching the project in Ninh Binh province, Kyoei expects to reduce its steel product prices.
Kyoei Steel is also involved in joint–venture of Thi Vai International Port in Ba Ria-Vung Tau province. This US$56 million project has been operated since 2014.
