RAYONG - JFE Steel Corp, Japan's second-largest steelmaker, expects its US$300-million galvanised steel sheet plant in Thailand will run at full capacity in the final quarter of next year, brushing aside concerns about anti-government protests here.
JFE chief executive Eiji Hayashida shows Industry Minister Prasert Boonchaisuk around the new factory yesterday. SOMCHAI POOMLARD
The facility, with a capacity to produce 400,000 tonnes per annum of hot-dipped galvanised steel sheet, is JFE's first such plant in Asean and the second outside Japan after China.
JFE is also starting construction of a $300-million continuous galvanising line (CGL) in Indonesia, the country's first continuous CGL for automobiles, at MM2100 Industrial Town, an industrial estate near Jakarta. The Indonesian plant has the same capacity as the Thai plant and is scheduled to open in March 2016 by the wholly-owned subsidiary PT JFE Steel Galvanising Indonesia.
"The plant in Indonesia will mainly serve the domestic market," said chief executive Eiji Hayashida at the opening of the wholly-owned subsidiary JFE Steel Galvanising (Thailand) (JSG) yesterday.
Located in Hemaraj Eastern Seaboard Industrial Estate in Rayong, the plant began commercial production in April this year, with the first shipment to customers starting last month. The Thai facility still has area available for future expansion, said Mr Hayashida.
"Market demand in the automotive industry is growing faster than ever. The Asean Economic Community (AEC) will drive demand growth in the future," he said.
Thailand's vehicle output reached 2.48 million units last year, the ninth-largest globally. Production is projected to reach 3 million units in five years.
Indonesia is Asean's second-largest automobile producer as a production and export base for many global automakers. Local demand for high-end automotive steel sheet is expected to grow as automakers expand capacity, including through the construction of new plants.
JSG managing director Yoshiyuki Morita said the plant is expected to reach maximum capacity in the fourth quarter of 2014 without direct exports. He said as of now the company is not concerned about political stability in Thailand.
JFE studied the feasibility of investing in a $3.6-billion integrated steel mill in Vietnam, its first outside Japan, but has not made a decision.
Apart from JSG, JFE holds 36% in Thai Cold Rolled Steel Sheet Plc, which supplies raw material to JSG, and also 3% in Sahaviriya Steel Industries Plc (SSI).