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|SSI plans to invest more in steel overseas - Report|
|The Bangkok Post reported that Thailand's largest steel maker Sahaviriya Group of Companies is planning to invest more in steel overseas, while looking to invest in iron ore mining after acquiring an English steel blast furnace company.
Its deal through the Sahaviriya Steel Industries UK (SSI UK) to acquire the USD 429 million Teesside Cast Products in northern England from India's TATA Steel Group is thought to be a stepping stone for the firm to become a multinational company.
Mr Win Viriyaprapaikit president of Sahaviriya Steel Industries said that "If we were successful in developing a smelting plant in Thailand, we would have focused on local projects and never would have made this move. It was a turning point."
Mr Win joins Teesside schoolchildren in releasing balloons to mark the official handover of the facility to SSI. The group struggled in the past as its planned smelting plant worth THB 500 billion stalled after protests by environmentalists and community leaders at Bang Saphan in Prachuap Khiri Khan.
Mr Win said that "At present, SSI's assets in Thailand and Teesside are equal. But if our expansion plan in England is successful, the assets overseas will become much larger, as we don't have any big investments in Thailand."
Mr Win said that "London is a global hub for metal and mining, so listing there can help us raise funds and build up our name."
SSI raised USD 1 billion in funds recently, with USD 469 million going to TCP's acquisition, USD 381 million for working capital and USD 150 million for facilities upgrades and minor investment. It also plans to list on the London stock market.
The company is considering either listing SSI UK, or parent firm SSI could seek a dual listing. As it plans to complete a vertical integration in the steel making industry, from iron mining to downstream, SSI UK will look for investment in small and medium sized mines in Canada and Scandinavia, either through joint venture or takeover options.
The location in the northeast of Middlesbrough and a deep sea port facility of which TATA retained 50% ownership, provides an opportunity for future investment. However, Mr Win noted each step will be made cautiously since each would require massive capital.
Mr Win said that "Expansion may happen in the next few years as Teesside's facility has been preparing to upgrade capacity to 10 million tonnes of slab and related products."
The 3.5 million tonnes blast furnace is on course to resume production after TATA shut it down a year before, operating only a coking coal oven and power generation to feed other steel plants in the area.
For this year, it plans to produce 75% of full capacity of Teesside, with full utilization next year when it could have leftover supply to distribute to other companies.
Mr Win said that "Our next step in the near future is running the facility at its full capacity of 3.5 million tonnes steadily."
The firm is also optimistic about global steel demand, as a record of 1.5 billion tonnes usage this year is possible, pushing the price of slab to a minimum of USD 750 a tonne while hot rolled coil, which stayed at USD 850, could reach USD 1,000 per tonne on average.