Source: Myanmar Times
South Korea’s Posco Daewoo Steel Co Ltd and Millcon Steel Co Ltd of Thailand will co-invest with the government in a joint venture to operate a state-owned steel factory in Myingyan, Mandalay, according to a statement released by the Ministry of Industry.
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.
However, the factories have been loss-making and operations have been suspended since April 2017.
The government is now considering options to reopen those factories with support from private companies as part of a move to further develop the industrial sector.
However, Myanmar lacks the necessary technology, which will require foreign direct investments. It must also ensure demand for locally produced steel is sustainable to justify the long term investments, according to the Ministry of Industry.
Phase 1 of the Myingyan factory, which has been given the No.1 Steel Mill moniker, is already complete. Phase 2 and phase 3 is still pending.
The No.2 Steei Mill in Pang Pet had been under construction with support from Russia before it was suspended.
The government will make the necessary announcements once further details of the Myanmar-Korea-Thai joint venture are ironed out and made available, said U Kan Chun, managing director of No.1 Heavy Industries Enterprise, which produces light and heavy motor vehicles, under the Ministry of Indusry.