Japan's JFE Steel will invest in a steelworks being built by Taiwan's Formosa Plastics in Vietnam, marking the first investment by a Japanese firm in blast furnace business in Southeast Asia, the Nikkei business daily said on Friday.
JFE will finalise plans as early as August to take a roughly 5 percent stake in the plant's operating company for about 30 billion yen ($242 million), the report said, without citing sources.
Eiji Hayashida, President of the steelmaker's parent, JFE Holdings, told Reuters in an interview earlier this month that JFE would decide whether to invest in the Vietnamese project by the end of the summer.
A JFE Steel spokesman said nothing has been decided yet, and called the report "speculation".
The roughly $10 billion steelworks being built in Vietnam's central Ha Tinh Province will start production as early as next spring, with initial capacity of 7 million tonnes of crude steel per year, the report said.
Formosa Plastics plans investments of another $10 billion in secondary construction to raise the plant's crude steel capacity to around 22 million tonnes per year, and JFE Steel will consider additional investments in the expansion, the report said.
JFE has a three-year business plan, unveiled in April, to spend 200 billion yen overseas to expand JFE's global network to drive its growth and counter an expected fall in demand in Japan where the population is shrinking.
Last year, JFE - the world's 9th biggest steelmaker by output - scrapped a plan to build its own steelworks in Asia due to the global supply glut.