Korea’s SeAH Steel to Expand Production Capacity of its Vietnamese Steel Plant

According to the latest reports, SeAH Steel which is headquartered in Seoul, South Korea is all set to increase its presence in Southeast Asian market over rising concerns of trade protectionism globally.

The company is planning to invest about 40 billion won (USD 36 million) to expand production capacity of its second plant in Vietnam, SeAH Steel Vina (SSV) from 240,000 tonnes to 311,500 tonnes per year. The plant is located in Dong Nai province of Vietnam. The expansion is expected to be completed by March next year.

The main reason behind this expansion by SeAH steel is the growing restrictions by U.S. government on steel imports which has made steel majors in other countries to target new markets and Vietnam is one of the key markets in Southeast Asia which is enjoying a high economic growth rate.

SSV's utilization rate stood at only 57% in 2014 but reached 81%, a record high, this year. The plant will serve as an important production base for SeAH Steel in the Southeast Asian market.

In addition to SSV, SeAH Steel is also targeting the country’s local market through its first plant, Vietnam Steel Pipe (VSP) located in Hai Phong province of northern Vietnam. Steel pipe products for piping and structures produced by VSP are entirely sold in the Vietnamese market. The utilization rate of VSP’s plant increased from 68% in 2013 to 72% this year.

SeAH Steel production base

SeAH Steel which was founded in 1960 has its production base in various countries that include United States, Japan, China, Vietnam, the United Arab Emirates, Italy, and Indonesia. It provides carbon steel pipes, stainless steel pipes, titanium tubes, and galvanized color steel sheets.

In Thailand, the company has set up a joint venture ‘POS SeAH Thai’ between SeAH Special Steel (25% stake) and POSCO South Asia (75% stake). The company is located in Si Racha, Chonburi town of Thailand and produces cold heading quality wires for Thailand’s automobile market.

As the company has its production base in U.S. also, it is planning to increase the production capacity of its manufacturing facility in U.S. this year amid tariffs of 25% on U.S. steel imports. In August this year, the company management quoted that the current capacity utilization of SSUSA (SeAH Steel USA) is around 30%, but it is expected to rise to at least 70% late this year. The company majorly manufactures OCTG (Oil Country Tubular Goods) and its annual production capacity is 150,000 tonnes per annum.