Tata Steel decides to sell assets in Southeast Asia to the HeSteel group

Steel giant Tata Steel has announced its decision to sell its southeast Asian steel assets under NatSteel Asia to the Chinese HeSteel group. Reports show that the company is already in talks with a Chinese firm to sell assets in three countries - Singapore, Thailand and Vietnam. It is not clear if the agreement was signed by both parties.

As part of the deal, Tata Steel intends to sell the only electric arc furnace in Singapore, as well as downstream steel rolling mills and a rebar and wire rod plant in Hanoi, Vietnam, with a production capacity of around 200,000 tonnes per year. The assets for sale also include a prestressed concrete bar and wire plant operated by Siam Industrial Wire and a joint venture for the production of zinc coated aluminum products.

Incidentally, the state-owned HeSteel Group - China's second and fourth largest steel group in the world - has been expanding its overseas presence in the past few years through key acquisitions. The company acquired the assets of the Swiss trader Duferco and several steel assets in Serbia. In addition, it also acquired South African iron ore company Palabora Mining Co.

Meanwhile, Tata Steel announced that the decline in production in Europe is likely to affect the company's 3Q financial results. Production at European plants for the quarter ended December 31, 2018 decreased significantly by 12.7% to 2.33 million tonnes. This was mainly due to shutdowns and operational problems at factories in the Netherlands and Wales.