Taiwan's E United Group Ends Partnership with Japan's JEF to Set Up Steel Mill in Vietnam
2014/11/05 | By Steve ChuangTaiwan-based E United Group, a conglomerate of steel, healthcare and educational and recreational businesses, confirmed in mid-September the end of its 2-year partnership with Japan's JEF Steel Corp. to set up a steel mill in Vietnam.
JEF announced the termination for unknown reasons, as well as canceling its memorandum of understanding signed with E United.
To expand its steel business to the upstream sector, E United initially joined hands with Taiwan's wire rod maker, Tycoon Group Enterprise Co., Ltd., to jointly invest US$3.6 billion to set up a steel mill with annual crude steel output of 7 million tonnes in Vietnam some two years ago. Later, the group invited JEF, which planned to build foothold in Southeast Asia then, as partner.
Inviting JEF to the partnership was widely seen as a successful step E United had taken to boost overseas business deployments, as the Japanese firm is a major global crude steel maker with advanced carbon steel production technologies and capacity of over 28.8 million tonnes a year. With brisk economic growth in Vietnam triggering considerable demand for steel, the partnership was to create mutual benefits.
With JEF's pulling the plug on the partnership to force E United to suspend investment in Vietnam, E United stated that it will try to keep moving forward the project and negotiate with the Vietnamese government accordingly.
Industry insiders say that suspension of the project will surely sideline E United's attempt to penetrate the Vietnamese market for steel, especially when many of its competitors as Taiwan's Formosa Plastics Group and Korea's Pohang Iron and Steel have left behind E United by building mills there.
Adding salt to injury, E United has also been forced to relocate its stainless steel mill that cost US$790 million to construct in a special economic zone in Guangzhou Province, southeastern China, in 2000 and with planned output of 2 million tonnes a year, mainly due to growing concerns over sustainable urban development and eco-protection; while E United could as option sell for profit the mill to local steelmakers, which could influence the group's decision to continue with stainless steel business in China. (SC)
| Overview of E United Group's Overseas Steel Business Deployments | |||
| Investment
| Investment Value
| Planned Annual Output
| Scheduled time of startup
|
| Stainless steel mill in Guangzhou, China
| US$790 M.
| 2 million tonnes
| 2003
|
| Carbon steel mill in Vietnam
| US$3.6 Bn.
| 7.5 million tonnes
| Suspended
|
| Yieh Phui (China) Technomaterial Co., Ltd.
| US$620 M.
| 1.6 tonnes of cold-rolled steels 1.2 million tonnes of galvanized steel coils 560,000 tonnes of painted steel coils
| Already operational
|
| Fujian Lian De Enterprise Co., Ltd.
| US$320 M.
| 200,000 tonnes of nickel-iron alloys
| By end of 2014 (for the first production line)
|