Locally-owned steel maker SMC Trading Investment Joint Stock Company has established a steel production joint venture with Japanese companies Toami and Hanwa
Based in the southern province of Ba Ria-Vung Tau’s Phu My 1 Industrial Park, the new company, SMC Toami LLC, has chartered capital of $3 million. SMC holds a 25 per cent stake, while Japan’s leading maker of welded wire mesh Toami holds 50 per cent, with Hanwa holding the remainder. SMC Toami will produce welded wire mesh, and export, import, distribute and retail steel products.
Nguyen Ngoc Anh, chairman and general director of SMC, which is the largest distributor of steel in Vietnam, said that Hanwa had become SMC’s major stakeholder since 2012 and currently support SMC in providing management experience, production and deployment of business co-operation programmes. Hanwa had also helped SMC co-operate with Toami and establish the joint venture.
Production of welded wire mesh remains humble in Vietnam. However, SCM Toami intends to boost production of the product in the near future, based on the major advantages of the three stakeholders.
Established 25 years ago, SMC produces 800,000 tonnes of assorted steel products, including construction steel, hot rolled steel sheets, flat steel sheets, formed steel sheets and coated steel.
The Ho Chi Minh City-based company has four steel plants with total annual capacity of 300,000 tonnes, and six member companies and one joint venture with Japan’s Sumitomo Corporation.
SMC has grown at an average 8-10 per cent per year and has been listed on the Ho Chi Minh City Stock Exchange, with Hanwa as a major stakeholder.
SMC will provide SMC Toami with information about its existing customers and support it in seeking stable material supplies at reasonable price levels, along with other relevant market information. It will also lend land, plants and equipment to SMC Toami’s investment projects.
Toami has pledged to provide technical support for SMC Toami in Vietnam. It will also introduce modern technology and new products into the country.
Hanwa will introduce projects that require steel to SMC Toami, so that it can expand its business and production.
At present, welded wire mesh occupies just 0.7 per cent of SMC’s total steel consumption.
“SMC Toami will help SMC further strengthen its firm niche in the market and beat all rivals and even imported steel products,” Anh said. “We can master modern technology, with stable materials sourced from Japan. This will result in low prices for products, greatly benefiting consumers.”
Amid local economic woes, SMC continued expanding its market share and consumption with total output growing 10.6 per cent against the initial plan in the first half of this year.
SMC has also set a target of selling at least 380,000 tonnes in the second half of this year with predicted post-tax profits of nearly $1 million.
It is expected that the company’s steel product sales will continue growing strongly, especially in terms of hot rolled steel sheets, flat steel sheets, and coated steel which are expected to account for nearly 40 per cent of the company’s total steel sales.
By Thanh Tung - VIR