HANOI, Vietnam (AP) - South Korea steel maker Posco will begin building a $1.1 billion steel plant in August in South Vietnam to meet growing demand in coming years, an industry official said Thursday.
Posco received an investment license in March and is getting ready for the construction of the Phu My steel plant, which is slated for production in 2009, said Pham Chi Cuong, chairman of the Vietnam Steel Association.
Posco issued a statement to South Korea's financial regulator Thursday in Seoul saying it is studying the feasibility of an integrated steel plant in Vietnam but that nothing has been decided.
Posco spokeswoman Ko Min-jin only reiterated Posco's announcement late last year that it planned to start building a cold-rolled plant in Vietnam sometime in the second half of the year.
The plant would be Posco's third steel plant in Vietnam.
It will be built in two phases, Cuong said. The company will begin investing $340 million to start construction of a cold-rolled steel plant scheduled to start production in 2009, he said. A second phase will then raise production at the plant to 3 million tons, including hot-rolled steel, by 2013.
''Most of the steel products will be used for the local market,'' Cuong said.
Vietnam will need to import four million tons of cold-rolled steel products this year and demand will rise, he said.
Government figures show Vietnam's imports of cold-rolled steel rose 8.4 percent last year to 3.63 million tons. The value of the imports rose 1 percent to $2.14 billion.