FPG still seeking new partners in Vietnam steel plant project

Taipei--Formosa Plastics Group (FPG, ????), one of the leading conglomerates in Taiwan, said Tuesday that it is still in the process of finding partners to jointly invest in the improvement and expansion of its steel plant in Vietnam, which reopened earlier this year after months of inactivity due to a toxic waste spill in 2016.

Following the environmental disaster, FPG pledged an investment of US$1 billion in two stages to improve environmental safety and increase capacity at Formosa Ha Tinh Steel Corp. in the Vung Ang Economic Zone in Ha Tinh Province. The first phase of the project was completed in late July by FPG and its major subsidiaries, while another US$500 million will be put into the project in the second phase, by issuing new shares, FPG said.

The group said, however, that is still seeking new partners for the second phase of the project and has not yet decided on any enterprises. Also on Tuesday, the Commercial Times reported that FPG, the major shareholder in the steel plant, had invited Hanoi-based VietJet Air to invest in phase two of the project by taking a 4-5 percent stake in the plant.

The inclusion of VietJet Air will help build closer business ties between Taiwan and Vietnam and allow FPG to put down roots in the Vietnamese market and penetrate the Association of Southeast Asian Nations (ASEAN) bloc, the report said, citing unnamed sources at Formosa Ha Tinh Steel.

China Steel Corp. (??), the largest steel maker in Taiwan, and Japan's JFE Steel Corp. also hold stakes in the Vietnamese steel mill, with investments of more than US$10 billion.

By the end of this year or early 2018, total production capacity at the plant expected to reach about 7 million tons, making it the largest steel mill in the ASEAN market.

In April 2016, an accidental toxic waste spill at the Formosa Ha Tinh Steel plant resulted in the pollution of some 200 kilometers of Vietnam's coastline, devastating areas that are heavily dependent on fishing and tourism.

After the spill, the plant was closed until May this year and the group paid more than US$500 million in compensation.

The FPG steel complex was also one of the targets of anti-Chinese protests staged by Vietnamese workers in May 2014 over China's deployment of a US$1 billion oil rig in disputed waters in the South China Sea.

Source: Focus Taiwan News Channel