JFE Meranti Myanmar to build $85M steel plant in Thilawa
5 March 2018
Japanese steel maker JFE Meranti Myanmar held its ground-breaking ceremony at Zone B of the Thilawa Special Economic Zone (SEZ) to much fanfare last Friday. It is the first to commence operations at Zone B.
“This ceremony is a symbol of the development in Myanmar-Japan bilateral cooperation and friendship,” Vice President U Henry Van Thio said during the ceremony.
JFE Meranti Myanmar is a joint venture between JFE Steel Corporation, Meranti Steel, JFE Shoji Trade Corporation, Marubeni-Itochu Steel Inc, and Hanwa Co.
The JV will this year commence construction of the JFE Steel Corporation, an $85 million steel plant. When complete in 2020, the plant will have the capacity to produce 180,000 tonnes of galvanized steel and 90,000 tonnes of coloured steel, which will be used to meet the infrastructure development needs of Myanmar. Steel is the main component in the construction of infrastructure.
The move comes at a time when infrastructure spending in Myanmar is expected to rise in the years ahead as the government works with lenders and the private sector to meet the needs of the country.
Currently, around 90 percent of steel used in Myanmar is imported. As such, Thilawa’s JFE Meranti will be expected to help meet demand for steel in Myanmar, said U Henry Van Thio.
The Thilawa SEZ, which is located on the outskirts of Yangon - is the first SEZ built -with cooperation from the Japanese - in Myanmar. Since its official launch in September 2015, Thilawa SEZ has received over $1 billion in foreign direct investments.
In 2017 alone, there were 159 foreign proposals to do business in the SEZ, which is double the number of proposals made in 2015, said U Set Aung, chair of Thilawa SEZ Management Committee.
Currently, around 90pc of the land available in Zone A of the SEZ has been acquired, compared to around 50pc of Zone B, U Set Aung added.
Besides meeting the domestic needs of Myanmar, “Thilawa will also become a major economic and manufacturing hub for Asian nations,” Japanese Ambassador H.E. Mr. Tateshi Higuchi said during the ceremony. “The success of Thilawa SEZ is very important both for Japan and Myanmar.”
Meanwhile, the government is also working to restart operations at two shuttered state-owned steel plants to meet anticipated demand.
In a statement released last month by the Ministry of Industry, the government announced that it would co-invest with South Korea’s Posco Daewoo Steel Co and Millcon Steel Co of Thailand to form a joint venture to operate the state-owned steel factory in Myingyan, Mandalay.
Posco Daewoo and Millcon Steel have already met with U Khin Maung Cho, Minister of the Ministry of Industry in January to discuss the various possibilities of cooperation. These included Build – Operate – Transfer (BOT) schemes as well as profit sharing arrangements under a joint venture, the statement said.
There are currently two state-owned steel factories in Myanmar. The second factory is in Pang Pet, Taunggyi township in Shan State. The factories have been loss-making and operations have been suspended since April 2017.