China Steel Corp (中鋼), the nation’s largest integrated steel maker, has decided to increase its investment in Formosa Plastics Group’s (FPG, 台塑集團) Vietnam steel venture to help boost the latter’s investment and capital structure.
The Greater Kaohsiung-based company said in a statement yesterday its board agreed to increase its investment in Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業) by US$40 million, a move that would help it maintain a 5 percent stake in FPG’s steel mill in Vietnam.
In 2010, China Steel invested US$135 million for a 5 percent stake in the FPG steel mill, which was capitalized at US$2.7 billion with a total investment of about US$80 billion, as the company aimed to have access to supplies of raw materials, such as semi-finished steel from the Formosa plant with lower transportation costs and market risks.
“China Steel has decided to increase by US$40 million its investment to maintain a 5 percent stake in that company, after Formosa Ha Tinh Steel Corp revised upward its total investment by US$2.117 billion and boosted capitalization to US$3.5 billion to improve financial structure,” the statement said.
China Steel itself has a cold-rolled steel mill in Vietnam, China Steel Sumikin Vietnam Joint Stock Co, which is a joint venture with Japan’s Sumitomo Metal Industries Ltd, established in 2009.
The company’s board yesterday also approved a plan to set up a sheet-cutting, processing and distribution venture in Qingdao City in eastern China’s Shandong Province, which will be capitalized at US$20 billion.
China Steel said it planned to invest US$12 million for a 60-percent stake in the venture, with the remaining shares held by its subsidiary China Steel Global Trading Corp (中貿國際) and local compressor maker Rechi Precision Co (瑞智精密), according to the statement.
China Steel said it hoped the investment would help it expand distribution channels in China’s Huabei region, which includes Beijing, Tienjing, Hebei Province, Shanxi Province and Inner Mongolia.
In Taiwan, the company’s board yesterday agreed to a 32-month reconstruction plan of its No. 2 continuous annealing line, beginning next month and running through April 2005, which is expected to help produce better products with lower costs and using less electricity, China Steel said.
The directors of the board yesterday also signed off on the management's financial report for the first six months, during which China Steel posted a net income of NT$1.95 billion (US$64.9 million), down 87.3 percent from NT$15.34 billion a year earlier, with earnings per share falling to NT$0.13 from NT$1.16 a year earlier. Revenue in the first half dropped 7.87 percent to NT$110.66 billion from NT$120.13 billion the year before.
Fubon Securities Investment Services Co (富邦投顧) analyst Kevin Lin (林茂揚) said the first-half results were in line with the company’s unaudited numbers released earlier, adding that he did not expect the company to present any profit turnaround in the short run.
"China Steel has cut its domestic list prices two times in a row and reduced output," Lin said in a note. "We are also skeptical about a long-term turnaround due to unfavorable supply and demand dynamics."
China Steel’s share price fell 0.38 percent to close at NT$26.0 in Taipei trading before the announcement. The stock has fallen 9.72 percent so far this year, compared with the 5.6 percent gain in the benchmark TAIEX.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS