Hiap Teck subsidiary to start building Kemaman steel complex in December

KUALA LUMPUR (Nov 23): Steel pipe manufacturer Hiap Teck Ventures Bhd’s (HTVB) 55% subsidiary Eastern Steel Sdn Bhd, will begin work on the first phase of the integrated steel complex in Kemaman next month and targeted completion by mid-2013.

HTVB executive director Low Choong Sing said on Wednesday the groundbreaking ceremony for the site would be on Dec 5.

Work on the phase one, stage one of the complex would be undertaken by China Shougang International Trade and Engineering Corp. This part of the project consists of the CONSTRUCTION [] of a blast furnace with a capacity of 700,000 tonnes of steel slab per year.

Phase 1 Stage 1's cost of RM754 million is to be shared by the shareholders of Eastern Steel. The other substantial shareholders of Eastern Steel are Orient Steel Investment Pte Ltd and Chinaco Investment Pte Ltd with 40% and 5% stakes respectively.

At the EGM on Wednesday, shareholders approved thea private placement of 32.2 million new HTVB shares to Shougang Singapore worth RM163.7 million, proposed renounceable rights issue with free warrants to raise RM220 million, and an issuance of RM180 million bonds.

The funds raised would be used to fund HTVB's portion of the project, as well as to repay borrowings.

Low said HTVB would probably look at bank borrowings to fund the phase one, stage two of the project.