[Vnbiz] Eminence / $30bil steel project in Thanh Hoa?

[Pham Hoang Duong]

Dear CACC,

Do anybody know about Eminence Group (below news) please? I check the internet sources like hoovers.com but cannot find any info about this company? Do you think this group is a real joker?

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http://english.vietnamnet.vn/biz/2007/05/695607/
$30bil steel project in Thanh Hoa?16:34' 16/05/2007 (GMT+7) 
          VietNamNet
Bridge – The US-based Eminence Group has announced it will make
investment in a big project in Nghi Son Economic Zone in the central
province of Thanh Hoa, which has the surprisingly high estimated
capital of $30bil.







Thanh Hoa province's mapThe
project will consist of a big steel complex and supporting works
including a deep water port, thermo power plant, shipyard, cement
plant, and urban area. It will also have kindergartens and a
university, research institute, general hospital, five-star hotel and
400 steel downstream factories.

Presenting the project on May 15
in Hanoi, Yang Wu Sung, Chairman of Eminence, said that Vietnam had
become very attractive in the eyes of investors around the world. He
said that Eminence was ready for the project in Thanh Hoa, capitalised
at $30bil.

The project on the steel mill in the first period is
expected to have the investment capital of $10bil (July 2007-2013), and
will have the capacity of 12mil tonnes a year in the initial time of
operation, and then 30mil tonnes a year.

The capital for the
giant project will be sourced from financial institutions, commercial
banks in the world, from Eminence group itself and from the land use
right value provided by Thanh Hoa provincial authorities. 

The
steel mill and other factories will use high technologies from Europe
and Japan. Iron ore and coke coal will be imported. Eminence now has 12
iron mines with the total reserve of 1.22bil tonnes in Indonesia,
China, Australia, Brazil, coke coal mines with the reserve of 200mil
tonnes in China and some other countries. Vietnam-sourced coal will be
used to run the thermo power plant.

The steel mill will churn
out high-quality products, including ingot steel, specialised steel,
bar steel used in industries, hot and cold rolled steel, galvanised
steel. Only a small part of the products will be consumed domestically,
while most of them will be for export. The mill will not make rolled
steel to compete with domestic steel mills.

Eminence plans to
build in Nghi Son EZ a modern steel mill which can put out competitive
products, meet Euro 3 standards on exhaust fumes.

Representatives
from big institutions in the world attended yesterday’s presentation,
including ADB, Deutsche Bank in London, TFG international consultant,
Hyder Consulting Ltd, Dragon Capital investment fund management
company, Davis Landon Seah financial group.

Mr Philipe from TFG,
the official consultant to the project, said that there were four
things Eminence requires from TFG 1. nominating and selecting
consultants to the project 2. uniting financial institutions to arrange
capital for the project 3. raising funds among international banking
community and 4. negotiating with equipment providers.

He said
that TFG had completed the negotiation with ADB and IFC, the arm of the
World Bank. The two organisations prove to be very interested in the
project and want updated information regularly.

He said that
many big commercial banks in the world have expressed their interest in
the project, but none of them had made an official statement about
funding the project.

Hyder Consulting Ltd will take
responsibility for the technical issues of the project, while David
Landon Seah will be in charge of financial consultancy. The two
companies will get set to build the feasibility study for the project,
which is expected to be completed at the end of 2007, before the
project is officially kicked off in early 2008.

Eminence said
that the demand for steel is very high in the world. Now in Asia,
Eminence has 30 big clients, which consume 4mil tonnes of different
types every year. Meanwhile, the consumption level reaches 24mil tones,
including 17mil flat steel and 7mil round steel products.

The
still mill to be built in Thanh Hoa is expected to churn out 3mil tones
of hot rolled steel a year by 2009, of which, 1mil tones will serve
domestic demand, 1.2mil for export, and the other 0.8mil tones for
making cold rolled steel.

According to Eminence, the iron ore it
explores is $50/tonne cheaper than the market price, while the coke
coal it produces is $40/tonne cheaper.

However, the information
provided by Eminence at the presentation seemed to not satisfy the
audience. Eminence did not provide enough information about itself
(fields of operation, experience, legal capital, names of projects they
have run). The Chairman of Eminence has refused an interview proposed
by VietNamNet, reasoning that he was busy with other jobs.

Nguyen
Van Loi, Chairman of the Thanh Hoa People’s Committee, said that
Eminence had asked Thanh Hoa authorities to make capital contribution
equal to 10% of the total project value. The capital will include the
land use right, while Eminence will borrow money for Thanh Hoa
authorities from the world’s financial institutions.

However, Mr Loi stressed that the Government would decide whether Thanh Hoa authorities will make capital contribution.

The project has been submitted to the Government and relevant ministries for consideration.

The
Nghi Son EZ, which has the surface area of 18,000 ha, is considered the
best place for making investment in the north thanks to deep water port
and favourable transport.
******************
 
Pham Hoang Duong
 
Maersk Broker Singapore
 
 













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