Japanese firm Sumitomo Corporation and Vietnamese company SMC are working together on a project to set up a steel processing plant.

Under the plan, the 4 million USD joint venture will process and distribute high-quality steel for construction projects. The joint venture will also act as an agent for Japanese construction steel companies selling their products in Vietnam .

The joint venture, set to be launched in April, aims to sell 50,000 tonnes of steel by the end of 2012, and 150,000 tonnes of sales earning 10 billion yen (125 million USD) by 2015.

SMC has a 50 percent share in the joint venture. The Sumitomo Corp. has a 30 percent share and Sumisho Tekko Hanbai has a 15 percent share, Sumitomo's Vietnamese subsidiary also has a 5 percent share in the joint venture.

The joint venture secures existing warehouses on 2,400 square metres of land at an SMC property. The project aims to expand if local demand for steel continues to be high.

It is estimated that Vietnam will require about 8 million tonnes of high quality steel in 2013, an increase of 60 percent against the figure for 2010.

Many Japanese steel businesses have invested in the construction market in Vietnam in recent years. Before Sumitomo, Nippon Steel & Sumikin (NISC), also known as Marubeni-Itochu Steel, announced their plans to build joint-venture steel factories in Vietnam while the JS Construction Group recently decided to build a factory specialising in making door frames for civil housing construction projects.-VNA