Formosa Holds off Operation of Scandal-hit Steel Mill in Vietnam

Tuan Minh

09:34 16/06/2016

BizLIVE - Taiwan-based Formosa Plastics Group has confirmed that it a scheduled operating date for its steel mill in Vietnam has been postponed, according to Taiwanese media.

Formosa Holds off Operation of Scandal-hit Steel Mill in Vietnam

A furnace of Formosa Ha Tinh steel mill. (Photo: Ha Tinh newspaper)

Formosa Plastics Group, a leading Taiwanese industrial conglomerate, will not start operating the first furnace of its steel complex in the Vung Ang Economic Zone in Vietnam’s central province of Ha Tinh on June 25 as scheduled, Taiwan’s Central News Agency (CNA) reported.
No new schedule for the kickoff of production has been set, CNA quoted Chang Fu-ning, vice president of Formosa Ha Tinh Steel Corp (FHS), as saying.
The confirmation came after a Taiwanese media report that FHS has been forced to postpone the start of operations of the furnace, as the Vietnamese Ministry of Finance has demanded that the group pay $70 million in taxes it has been accused of evading.
The agency added that the delay was also because the Vietnamese authorities needed more time to process an application filed by FHS to kick off production.
Chang said that FPG has communicated with the Vietnamese Ministry of Finance over the accusation of failure to pay tax.
The steel complex has an investment of up to $10.5 billion, including a deep-water port and a power plant. It is the first steel furnace investment project by Taiwan in an overseas market.
Formosa Plastics Groups’s subsidiaries operating in the plastics, chemicals, fiber and petrochemical sectors hold a 70% stake in the complex. China Steel Corp., the largest steel maker in Taiwan, and Japan’s JFE Steel Corp., own 20% and 5% stakes, respectively.
During its trial run, it churned out the first batch of hot-rolled iron in December 2015, the first of its kind to be produced in Vietnam.
FHS’ wastewater discharge has made headlines in domestic and foreign media after tons of dead fish mysteriously washed out onshore in four central coastal provinces namely Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue.
At a press conference after a monthly cabinet meeting on June 2, Minister and Chairman of the Government Office Mai Tien Dung said that the cause of the mass fish deaths had been identified, but could not be publicized as it needed independent commentaries.