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Formosa steel mill in Vietnam on hold

access_time Jun 18,2016 chat_bubble_outline 320 views

Formosa Plastics Group (FPG) yesterday confirmed that the scheduled launch date for operations at a subsidiary's steel mill in Viet Nam has been postponed with no new schedule decided.

Formosa steel mill in Vietnam on hold

Formosa Plastics Group (FPG) yesterday confirmed that the scheduled launch date for operations at a subsidiary's steel mill in Viet Nam has been postponed with no new schedule decided.

Taipei Times quoted Formosa Ha Tinh Steel Corp vice president Chang Fu-ning as saying that the No 1 furnace of the steel complex, which is in the Vung Ang Economic Zone in central Ha Tinh Province, would not become operational on Saturday next week as scheduled.

The confirmation came after Taiwanese media reported that FPG was forced to postpone the start of operations of a furnace at the plant because Vietnamese authorities had demanded that the group pay US$70 million in outstanding taxes.

The report said that the delay was also due to the fact that Vietnamese authorities needed more time to process an application filed by FPG to begin production.

Chang said that FPG has communicated with the Vietnamese Ministry of Finance over the alleged failure to pay taxes.

The $10 billion Formosa Ha Tinh Steel is the first steel furnace investment project by a Taiwanese firm in an overseas market.

FPG subsidiaries Formosa Plastics, Nan Ya Plastics Corp, Formosa Chemicals & Fiber Corp and Formosa Petrochemical Corp hold a 70 per cent stake in the Vietnamese project.

China Steel Corporation, the largest steelmaker in Taiwan, and Japan's JFE Steel Corporation have 20 per cent and 5 per cent stakes respectively.

Chang said that management of the Ha Tinh steel mill has been in discussions to develop a strategy to deal with the delay.

Construction of the Ha Tinh complex started in December 2013, and it has a projected annual capacity of 7.5 million tonnes targeted for domestic consumption and export to other Asian nations.

The project includes a port and a power plant that are to be completed by the end of 2020. 


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