Friday,Mar 09,2007
Tata Steel buys Vietnam mills for Rs 184 crore http://www.business-standard.com/compindustry/storypage.php?tab=r&autono=277142&subLeft=1&leftnm=1
BS Reporter / Kolkata March 09, 2007
A day after receiving Corus shareholders' approval to acquire the Anglo-Dutch steel company, Tata Steel today announced that it would take over two rolling mills in Vietnam for an enterprise value of $41 million (Rs 184 crore).
Tata Steel's wholly owned subsidiary, NatSteel Asia, will be the investment vehicle for the acquisition which is expected to be completed by June.
According to the agreement, NatSteel will acquire 100 per cent equity in a 250,000 tonne bar/wire rod mill in SSE Steel and 70 per cent equity in Vinausteel, which produces 180,000 tonne reinforcing bar.
A Tata Steel spokesperson said the buyout was part of the company's strategy to deintegrate its production.
The strategy entails setting up primary steel-making facilities closer to the countries rich in iron ore, coal, natural gas and finishing facilities in growing markets. The acquisition would provide Tata Steel with a larger footprint in South-East Asia region, including Vietnam. SSE Steel has one of the most modern rolling mills in Vietnam and the Vinausteel brand is the leading name in the country. The company currently operates a 100,000 tonne reinforcing bar / wire rod mill in a joint venture with VSC in Thai Nguyen, about 70 Km north of Hanoi. With the Vietnam acquisitions, Tata Steel's rolling capacity outside India stands at 4.1 million tonne, which includes 1.7 million tonne of Millennium Steel and two million tonne of NatSteel.
This is the fourth acquisition from the Tata Steel stable in the last two months. Apart from the big ticket Corus group acquisition, which catapulted Tata Steel to the fifth largest steelmaker in the world, the company entered into an agreement for the Kolkata-based Rawmet Industries in January. Rawmet has a ferro alloy plant near Cuttack.
Business Standard Ltd.