Binh Duong-based steel-maker Hoa Sen Group will invest about US$300 million into its first overseas investment project in Myanmar next year, primarily to manufacture corrugated iron, steel and construction materials.
The plan was approved at a shareholders meeting held in the city on Saturday. The US$300 million project will be completed in four phases. The first phase will cost US$10-30 million.
Representatives from Hoa Sen Group and several other Vietnamese companies will accompany the Prime Minister on an official visit to Myanmar to sign a memorandum of understanding concerning the project with the country's Ministry of Industry. The group will also establish a representative office in Myanmar's capital.
According to Hoa Sen Group's Board of Directors, the potential market in Myanmar, with support from the two governments, will create favorable conditions for the project. The group has already visited Myanmar to gauge investment opportunities. Le Phuoc Vu, the group's Chairman and General Director, said that Myanmar was a good match for Hoa Sen Group's products. He added that Myanmar's government would create favorable conditions for Vietnamese businesses to invest in areas that will benefit both sides.
Hoa Sen Group began exporting to Myanmar in October last year with great success, according to the group.
At the meeting, shareholders also approved the second phase of the Hoa Sen-Phu My corrugated steel mill project, worth VND850 billion, in the southern province of Ba Ria-Vung Tau. The project's first phase worth VND2,231 billion will be finished this year.
The first phase project includes South East Asia's first Non-Oxidization Furnace (NFO) technology steel-plating assembly line, with a 450,000 ton annual capacity as well as a color-plating assembly line which will produce 180,000 tons per year. The group will also build five steel coolant-laminating assembly lines with a one million ton annual capacity.
The group's new steel mill at Phu My 1 Industrial Park, also in Ba Ria-Vung Tau, produced its first hot-rolled galvanized iron coils, using its new non-oxidizing furnace technology, mid this month.
The mill will meet the domestic market's demand for thick-coated high-quality steel products. Hoa Sen Group expects its 15,000 to 20,000 tons monthly production will boost the group's revenue to nearly VND5 trillion in the fiscal year 2009-2010. "The group will increase its galvanized iron export proportion to 20-30% of output instead of the current 4% of total production," Vu said.
The group received credit worth VND450 billion from Vietcombank's Binh Duong and Vung Tau branches and Eximbank's Binh Duong branch.
Hoa Sen Group issued nearly 12 million shares worth VND538 billion to STIC Investments (Korea), FPT Securities Joint Stock Company and Bong Sen Fund Management Comapny in early March in a bid to mobilize capital for the Hoa Sen-Phu My project.
The group's sales reached VND2,831 billion with a VND189 billion net profit in the 2008-2009 fiscal year. This fiscal year, they aim to reach VND5,000 billion in sales and VND520 billion in net profits - a 76% and 175% increase respectively compared with last year.
In the past four months, the group has made VND1,428 billion in sales and VND185 billion in net profits, 29% and 36% of its target respectively.