POSCO informed last October that Nippon Steel, the world’s number two steelmaker, would buy a stake of 10 to 20% in the $ 490 million project as part of an effort to boost their bilateral alliance.

Cold-rolled steel is used in a wide variety of end products, including refrigerators and automobiles.

POSCO, the fourth-largest steelmaker internationally, had said that it would begin building the plant this year at the Phu My industrial complex near Ho Chi Minh City in southern Vietnam.

It plans to complete construction by the end of 2009. The facility is expected to be able to produce 1.2 million tonne of cold-rolled steel a year, according to POSCO.

POSCO has also said it plans to build another steel plant in the South-East Asian country that will eventually be able to produce three million tonne of hot-rolled steel a year.