MIDDLESBROUGH : Sahaviriya Group of Companies, Thailand's largest steel maker, is planning to invest more in steel overseas, while looking to invest in iron ore mining after acquiring an English steel blast furnace company."If we were successful in developing a smelting plant in Thailand, we would have focused on local projects and never would have made this move. It was a turning point," said Win Viriyaprapaikit, president of Sahaviriya Steel Industries (SSI), the SET-listed hot-rolled coil steel maker founded by his family.
The group struggled in the past as its planned smelting plant worth 500 billion baht stalled after protests by environmentalists and community leaders at Bang Saphan in Prachuap Khiri Khan.
Its deal through the Sahaviriya Steel Industries UK (SSI UK) to acquire the US$429-million Teesside Cast Products (TCP) in northern England from India's Tata Steel Group is thought to be a stepping stone for the firm to become a multinational company.
"At present, SSI's assets in Thailand and Teesside are equal. But if our expansion plan in England is successful, the assets overseas will become much larger, as we don't have any big investments in Thailand," said Mr Win at a ceremony to officially hand over TCP to SSI last week.
SSI raised US$1 billion in funds recently, with $469 million going to TCP's acquisition, $381 million for working capital and $150 million for facilities upgrades and minor investment. It also plans to list on the London stock market.
"London is a global hub for metal and mining, so listing there can help us raise funds and build up our name," said Mr Win. The company is considering either listing SSI UK, or parent firm SSI could seek a dual listing.
As it plans to complete a vertical integration in the steel-making industry, from iron mining to downstream, SSI UK will look for investment in small and medium-sized mines in Canada and Scandinavia, either through joint venture or takeover options.
The location in the northeast of Middlesbrough and a deep-sea port facility of which Tata retained 50% ownership, provides an opportunity for future investment. However, Mr Win noted each step will be made cautiously since each would require massive capital.
"Expansion may happen in the next few years as Teesside's facility has been preparing to upgrade capacity to 10 million tonnes of slab and related products," said Mr Win.
The 3.5-million-tonne blast furnace is on course to resume production after Tata shut it down a year before, operating only a coking coal oven and power generation to feed other steel plants in the area.
For this year, it plans to produce 75% of full capacity of Teesside, with full utilisation next year when it could have leftover supply to distribute to other companies.
"Our next step in the near future is running the facility at its full capacity of 3.5 million tonnes steadily," said Mr Win.
The firm is also optimistic about global steel demand, as a record of 1.5 billion tonnes usage this year is possible, pushing the price of slab to a minimum of $750 a tonne while hot-rolled coil, which stayed at $850, could reach $1,000 per tonne on average.
Shares of SSI on the Stock Exchange of Thailand closed unchanged at 1.23 baht in trade worth 36.57 million baht.
Source: http://www.bangkokpost.com
The group struggled in the past as its planned smelting plant worth 500 billion baht stalled after protests by environmentalists and community leaders at Bang Saphan in Prachuap Khiri Khan.
Its deal through the Sahaviriya Steel Industries UK (SSI UK) to acquire the US$429-million Teesside Cast Products (TCP) in northern England from India's Tata Steel Group is thought to be a stepping stone for the firm to become a multinational company.
"At present, SSI's assets in Thailand and Teesside are equal. But if our expansion plan in England is successful, the assets overseas will become much larger, as we don't have any big investments in Thailand," said Mr Win at a ceremony to officially hand over TCP to SSI last week.
SSI raised US$1 billion in funds recently, with $469 million going to TCP's acquisition, $381 million for working capital and $150 million for facilities upgrades and minor investment. It also plans to list on the London stock market.
"London is a global hub for metal and mining, so listing there can help us raise funds and build up our name," said Mr Win. The company is considering either listing SSI UK, or parent firm SSI could seek a dual listing.
As it plans to complete a vertical integration in the steel-making industry, from iron mining to downstream, SSI UK will look for investment in small and medium-sized mines in Canada and Scandinavia, either through joint venture or takeover options.
The location in the northeast of Middlesbrough and a deep-sea port facility of which Tata retained 50% ownership, provides an opportunity for future investment. However, Mr Win noted each step will be made cautiously since each would require massive capital.
"Expansion may happen in the next few years as Teesside's facility has been preparing to upgrade capacity to 10 million tonnes of slab and related products," said Mr Win.
The 3.5-million-tonne blast furnace is on course to resume production after Tata shut it down a year before, operating only a coking coal oven and power generation to feed other steel plants in the area.
For this year, it plans to produce 75% of full capacity of Teesside, with full utilisation next year when it could have leftover supply to distribute to other companies.
"Our next step in the near future is running the facility at its full capacity of 3.5 million tonnes steadily," said Mr Win.
The firm is also optimistic about global steel demand, as a record of 1.5 billion tonnes usage this year is possible, pushing the price of slab to a minimum of $750 a tonne while hot-rolled coil, which stayed at $850, could reach $1,000 per tonne on average.
Shares of SSI on the Stock Exchange of Thailand closed unchanged at 1.23 baht in trade worth 36.57 million baht.
Source: http://www.bangkokpost.com
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