Tata not set to wave Vietnam farewell
Tata not set to wave Vietnam farewell
The failure of Tata Steel’s $5 billion steel project in the central province of Ha Tinh appears not to have put off Tata Group’s interest in Vietnam.
Indronil Sengupta, chief executive of Tata Sons Limited – the holding company of Tata Group – in Vietnam, told VIR that Tata’s belief in the country “stands unshaken.” His announcement followed reports in the local media outlining Tata Steel’s withdrawal from a $5 billion investment plan in Ha Tinh’s Vung Ang Economic Zone. Tata reluctantly withdrew from the steel project last May following disagreements with the local authorities over the cost of site clearance.
Previously, Tata Steel asked for the same amount of financial support for site clearance that had been offered to Taiwan’s Formosa Group for their nearby $9.9 billion steel manufacturing and seaport complex. Ha Tinh provincial authorities instead demanded that Tata Steel should foot the entire bill for clearance.
“We were extremely serious and had spent over five years trying to develop the project. However, despite our sincerity and strenuous efforts, we could not successfully implement the project. We were disappointed as we had spent a significant amount of time and resources,” said Sengupta, who was previously chief executive of Southeast Asia Projects at Tata Steel Limited.
“Although it has been a setback, our confidence in Vietnam remains and we are pursuing a power project with proposed investment of $2 billion in the Mekong Delta province of Soc Trang,” he said, noting that Tata Power was also working towards an earlier commissioning date on the project which is reflective of its interest, confidence and faith in Vietnam.
Sengupta said Tata Steel was still considering participation in the steel and mining sector in Vietnam in the future “if the global dynamics and the local environment are conducive to the development of such projects.”
Tata is currently focusing on the power sector. Tata Power last November signed a memorandum of understanding with the Ministry of Industry and Trade for investing in Long Phu 2 project in the southern province of Soc Trang. The power investor quickly started engineering studies and geological surveys following the agreement, Sengupta said.
“We are very positive about Long Phu, and we don’t see site clearance issues arising as we are satisfied with the co-operation we have received from the leaders of Soc Trang so far,” he added.
With the potential growth of the economy and the expanding market, Sengupta believes that Vietnam will remain at the top of Tata’s list of interests. Tata products are already available in Vietnam via Jaguar and Land Rover passenger vehicles, Tata Daewoo buses and trucks and Titan watches.
“Several of our group companies have global marketing plans and will enter the Vietnam market based on demand,” said Sengupta.
vir
