JFE Steel Corporation, Maruichi Steel Tube Ltd and Toyota Tsusho Corporation are to buy Vietnamese spiral steel pipe manufacturer, Jeong An Vina Co.

The group will spend JPY1.3bn ($14.5M) for the pipe manufacturer from Jeong An Steel of South Korea, under a plan to directly manufacture and sell steel pipe pile and steel pipe sheet pile in Vietnam.

Jeong An Vina has a production capacity of 50kt/y and recorded sales of $10.9M in 2009. It was established by Hyundai Steel Pipe Co in 1995 and is based in Long Thanh, Dong Nai Province.

Following the acquisition, the company’s name will be changed. JFE Steel will provide the president and Toyota Tsusho will provide the executive vice president.

Jeong An Vina will be capitalized at $3.1M, shared 35% by JFE Steel, 35% by the Maruichi Steel Tube group and 30% by Toyota Tsusho.

The Maruichi group’s share will comprise a 30% share held by Maruichi Steel Tube Ltd. and 5% held by Sun Steel Joint Stock Company (Sunsco).

Sunsco, a joint venture company established by Maruichi Steel Tube, Toyota Tsusho, JFE Steel and others, processes galvanized steel sheet and steel pipe in Binh Duong Province.

The newly acquired company will manufacture steel pipe pile, steel pipe sheet pile and water pipe by combining existing facilities for spiral steel pipe manufacturing and coating with manufacturing technologies from JFE Steel.

The company intends to capture the strong demand for steel pipe, as well as explore new demand, in Vietnam’s construction steel market, working closely with Sunsco, which recently began operating a 16-inch medium-diameter welded pipe mill.

Following the acquisition, the company will begin supplying products under its new structure soon after obtaining necessary government approvals and licenses. It expects to raise shipments from 10kt/y at present to 50kt/y in the foreseeable future.

The company will leverage its three owners’ extensive technologies and networks to develop demand for steel pipe pile and steel pipe sheet pile in Southeast Asia, as well as contribute to infrastructure development in the region.

The demand for construction steel pipe is increasing rapidly, especially in Vietnam, due to a wave of newly launched projects for ports, railways and other major infrastructure.

To date, the three partners have been jointly considering the best possible manufacturing structure for the Vietnamese market and beyond.