October 10, 2007 -- Sahaviriya Group Co., the country's largest steel group, expects to start construction of its 500-billion-baht smelting plant early next year and to start production by 2009, says the group's director Win Viriyaprapaikit.
The project has become the target of environmental activists, who want it scrapped as they fear serious environmental side effects in Bang Saphan district, Prachuap Khiri Khan, where the site is located. However, Mr. Win said that the company was confident that the challenges could be overcome because the project had been downsized to avoid confrontation over disputed land. He said that the project had been transparent and had received a favourable response from the local community.
The group recently set up the new subsidiary, Sahaviriya Iron and Steel Co (SIS), to run the project, with Mr. Win as president. He said the company had invested 90 billion baht in the first phase, with a capacity of five million tonnes a year. To ensure its success, the company would invest in two stages, with 2.5 million tonnes of production capacity for each in order to help it conclude project finance deals.
The machinery and equipment suppliers would likely act as creditors and the company is negotiating with Asian suppliers. "Even though the project will require significant capital, we would say we have the capability to act independently," Mr. Win noted.
He added that steel investment was an important area of the financial sector that generated a high return due to attractive world prices. To secure raw material, SIS has already entered into agreements with two iron ore suppliers from Australia and Brazil.
The 15-year project consists of five phases, with a total annual production capacity of 30 million tonnes. Each phase would have a production capacity of five million tonnes.
Source: Bangkok Post
