China Steel Corp (CSC, 中鋼), Taiwan’s largest and only integrated steelmaker, yesterday said its joint-venture plant in Vietnam is expected to achieve full operating capacity of 7 million tonnes in 2019, paving the way for the company’s further expansion in Southeast Asia.
The company owns a 25 percent stake in Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業), which is a joint venture between CSC and Formosa Plastics Group (台塑集團) and the largest foreign direct investment venture in the country.
The first blast furnace at the plant began operating last month, CSC chairman Wong Chao-tung (翁朝棟) told reporters after an annual shareholders’ meeting in Kaohsiung.
“The construction of the second blast furnace is 80 percent complete and it is likely to be operational by the end of the year,” Wong said.
Each blast furnace has an annual capacity of 3.5 million tonnes, Kaohsiung-based CSC said.
As the investment in Formosa Ha Tinh Steel meets the required 40 percent local-content threshold, CSC’s products would be exempt from Vietnam’s trade tariffs, Wong said.
The Vietnamese government ordinarily imposes tariffs of 15 to 33 percent on Taiwanese steel exporters, he said.
CSC also aims to take advantage of Vietnam’s zero-tariff agreements with other ASEAN nations, Wong said.
The ASEAN bloc imports nearly 60 million tonnes of steel products per year, he told reporters, adding that the number is forecast to rise to 120 million tonnes per year.
Meanwhile, CSC said that it is optimistic about its business outlook for the rest of this year, due to sustained demand for infrastructure and electric vehicles worldwide.
The company said it is to supply electric steel for Tesla Motors Inc’s Model 3, which is scheduled to begin production next month.
From January through last month, CSC posted cumulative revenue of NT$141.04 billion (US$4.63 billion), a 26 percent surge from the NT$112.3 billion posted in the same period last year, a company filing with the Taiwan Stock Exchange showed.
The firm registered a pretax profit of NT$8.54 billion in the first five months of the year, representing a 68 percent jump from the NT$5.08 billion in the same period last year, data showed.
Shareholders yesterday approved CSC’s proposal to distribute a cash dividend of NT$0.85 per share, based on last year’s net profit of NT$16.04 billion.
That translated into a cash dividend yield of 3.5 percent based on the company’s closing price of NT$24.5 yesterday.
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