Tata Steel eyes Vietnam plant

Also eyeing fresh acquisition in South East Asia.

Tata Steel, the country's largest private sector integrated steel company, is planning to set up a production facility in Vietnam. This follows the company's acquisition of the Singapore-based NatSteel Asia last year which has a presence in the Asia Pacific region, including Vietnam.

Industry sources said the Vietnam government was keen on having a production facility of Tata Steel. "The Tata group's relationship with Vietnam has been strengthening over the last few years.

Vietnam's economy is poised for growth and its government has had a positive approach towards the Tata group of companies. Tata Steel may respond to the situation by setting up a production plant there," sources pointed out.

A Tata Steel spokesperson said the company was looking at many options in strategic markets. Any specific name would be speculative, he added.

In addition to having a presence in Vietnam through the acquisition of NatSteel, the Tata group of companies sells iron and ferro steel in that country.

Last year, the group had signed a contract to set up a hydro-electric power project in Vietnam. The Vietnam plant of NatSteel has a rolling capacity of 120,000 tonnes a year.

Vietnam has been witnessing a 7.5 per cent growth in its gross domestic product (GDP) annually and expects to record an 8.5 per cent growth this year.

The country has good quality iron ore and coal. In addition, the per capita steel consumption in Vietnam is pegged at 6 kg a year, India's one-fourth, indicating room for growth in steel demand.

Tata Steel, as part of its policy to expand its presence in the Asia-Pacific region, bought NatSteel for over Rs 1300 crore last year, which provided it a presence in seven countries "" Singapore, China, Thailand, Vietnam, Malaysia, the Philippines and Australia.

With more than 3,000 employees across the Asia-Pacific region, NatSteel Asia produces about 2 million tonnes of steel a year, making it a leading supplier of premium steel products for the construction industry.

The company recently unveiled a road map for the next 15 years, entailing an investment of Rs 1,00,000 crore for enhancing production capacity to 34 million tonnes.

This includes the setting up of a 12-million-tonne greenfield plant in Jharkhand, a six-million-tonne plant in Orissa and a five-million-tonne in Chhattisgarh, besides projects in Iran and Bangladesh.

It is also eyeing a fresh acquisition in Southeast Asia. "Due diligence is on for fresh capacity acquisition in the region to the tune of two million tonnes and the deal is expected to materialise over the next 4-5 months," sources said.