TAIPEI: Taiwan's leading industrial conglomerate Formosa Plastics plans to build one of Southeast Asia's biggest deepwater ports as part of a multi-billion-dollar project in Vietnam, an official said Tuesday.

The port will be sited near a steel mill the company intends to construct in central Ha Tinh province, said the official, who asked not to be named.

"It will become one of the biggest deepwater ports in Southeast Asia," the official told AFP, adding it will be able to accommodate freighters with a capacity of up to 300,000 tonnes when completed by 2012.

The steel mill, designed with an initial capacity of 7.5 million metric tonnes, will be located about 30 kilometres (20 miles) from Vietnam's largest iron ore deposit at Thach Khe.

"The steel mill is mainly aimed at Vietnam's domestic market, which is rising fast but so far has had to rely mainly on imports," the official said.

"But in the future, its steel products can also be sold to the neighbouring countries in the Southeast Asian region," he said.

He said the complex will be benefit from a free trade agreement the 10 members of the Association of Southeast Asian Nations have agreed to, aiming for zero tariff rates on virtually all imports by 2010.

The conglomerate plans to build a second steel mill and a petrochemical complex later in Vietnam.