Italian plant maker Danieli is taking a 20% stake in a project to build a hot strip mill in Vietnam that is claimed to be the country’s first.

The JV will be 80% owned by Vietnam Steel Corp and 20% by the Italian company. The mill will be built in Phumy, 100km south east of Ho Chi Minh City. It will produce hot rolled coils with a capacity of 2Mt/y. This will cover part of the country’s 8Mt/y demand for HRC.

The investment will be $550M and the plant is scheduled to be in operation before the end of 2011. The agreement was signed by president of Vietnam Steel, Dau Van Hung and Danieli CEO, Gianpietro Benedetti.