Dung Quat steel super- project: investor resumes interest

VietNamNet Bridge - E-United has unexpectedly expressed its willingness to come back to Vietnam to develop the Guang Lian steel project which it once gave up because of financial problems.

VietNamNet Bridge - E-United has unexpectedly expressed its willingness to come back to Vietnam to develop the Guang Lian steel project which it once gave up because of financial problems.

Dau Tu reported that the Dung Quat Economic Zone Board of Management and Guang Lian last week had a working session on the issue.

The newspaper quoted its source as reporting that it is too early to say about the comeback, because the inspection over the project is still on the go.

The Quang Ngai provincial authorities, after E-United announced its leaving, planned to take back the investment license. In December 2015, the local authorities set up an inspection team to examine the use of the allocated land and the project implementation.

Licensed in 2006, Guang Lian has experienced a lot of changes. At first, the project was registered by Taiwanese Tycoons which planned to set up a 5 million ton steel mill with the investment capital of $1 billion.

E-United has unexpectedly expressed its willingness to come back to Vietnam to develop the Guang Lian steel project which it once gave up because of financial problems.

Later, the project had one more investor – E-United Group. The two investors raised the investment capital to $3.3 billion, while E-United became the major investor with the capital contribution ratio of 90 percent.

In 2011, they asked for permission to raise the capacity of the mill to 7 million tons a year and the investment capital to $4.5 billion.

However, E-United met big difficulties in the capital arrangement. Meanwhile, in 2012, the project was eyed by JFE Group from Japan, one of the world’s largest steel manufacturer with good financial capability, technologies and experiences.

However, just two years after E-United and JFE signed an MOU on cooperation, in September 2014, JFE announced it quit the project.

After that, E-United, the only left investor, asked to lower the investment capital of the project to $2 billion. Meanwhile, in mid-2015, it stated it could not arrange capital for the project.

And now, E-United says it wants to come back to Vietnam to continue developing the project.

While state agencies have not made any statement about the information, experts have commented that Vietnam needs to be cautious when working with the investor.

Former chair of the Vietnam Steel Association Pham Chi Cuong said that the investor is ‘unreliable’ because of its limited financial capability.

“In its homeland, Taiwan, E-United has never been considered a prestigious enterprise. It is just a very small enterprise and it only has one very small work in Thailand,” Cuong said. “E-United quite does not have experience in steel manufacturing”.

“I think it would be better not to spend time working with the investor,” he said.

Nguyen Van Ngai from the HCM City Agriculture and Forestry University also commented that E-United decided to come back to Vietnam with several attempts and Vietnam needs to clarify the attempts before making decision.