Tata Steel Decides to Sell Southeast Asian Assets to HeSteel Group

SEATTLE (Scrap Monster): Private steelmaking giant Tata Steel announced its decision to sell its Southeast Asian steelmaking assets under NatSteel Asia to Chinese HeSteel Group. Reports indicate that the company is already in talks with the Chinese firm with regards to sale of assets in three countries-Singapore, Thailand and Vietnam. It is not clear whether an agreement has been signed by the two parties.

As part of the deal, Tata Steel intends to sell the Singapore city’s sole electric arc furnace along with downstream long steel re-rolling mills and a rebar and wire rod mill in Hanoi, Vietnam with production capacity of around 200,000 mt per annum. The assets under sale also include pre-stressed concrete steel strand and wire plant operated by Siam Industrial Wire and a zinc aluminum coated products joint venture.

Incidentally, state-owned HeSteel Group-China’s second largest and world’s fourth largest steelmaking group has been expanding its overseas presence through key acquisitions over the past several years. The company had acquired assets of Swiss trader Duferco and several steelmaking assets in Serbia. In addition, it had also acquired South African iron ore miner Palabora Mining Co.

Meantime, Tata Steel announced that lower production from Europe is likely to impact the Q3 financial results of the company. The production from its European plants registered significant decline by 12.7% during the quarter ended December 31, 2018 to total 2.33 million tonnes. This was mainly on account of shutdowns and operational issues at the Netherlands and Wales plants.