BizLIVE - Taiwan’s Formosa Plastics Group plans to invest an additional $1 billion in its scandal-hit steel project in central Vietnam.
Formosa Plans to Pour another $1 Billion into Vietnam Steel Project
A view of the Formosa steel plant in Ha Tinh. Photo:
Major members of Formosa Plastics Group, Taiwan’s largest industrial conglomerate, have announced they are planning to invest $1 billion in Formosa Ha Tinh Steel Corp (FHS), the owner of a sizable steel project in Vietnam.
The fund is to accelerate construction of a $10.5 billion steel mill project, the Taipei Times reported.
The group’s four member companies namely Formosa Plastics Corp, Nan Ya Plastics Corp, Formosa Chemicals & Fibre Corp and Formosa Petrochemical Corp, each hold an 11.43% stake in the Vietnamese unit.
Based on shareholding ratios, each company is to pay nearly $57.17 million in the first installment, according to separate filings with the Taiwan Stock Exchange.
Meanwhile, Formosa Taffeta Company, a textile affiliate, which owns a 3.85% stake in FHS, will first invest $19.23 million.
Formosa’s steel project is the largest foreign direct investment in Vietnam to date, and the new facility is expected to be the biggest integrated steel mill in Southeast Asia, data showed.
The first blast furnace of the steel complex is expected to begin operations by the end of the first half while the kick-start was initially scheduled for last year, the group said.
A toxic leak from the plant in April last year caused one of the worst environmental disasters in Vietnam along more than 200 kilometers of coastal line in four Vietnamese central provinces. Formosa had to pay $500 million in compensation for affected people and repair of maritime consequences.
An inspection team of the Vietnamese environment ministry last month concluded that FHS met conditions to start test runs of its steel mill after the plant had tackled 52 out of 53 violations identified in an official investigation into the toxic spill that caused the disaster.
The company in March said it would add another $346.3 million to the project to bring the total investment to $11.03 billion, aiming to enhance its environmental facilities.