Vietnam's top steelmaker Hoa Phat to build $2.7 billion complex

By Ngoc Tuyen   February 7, 2017 | 01:50 pm GMT+7
Vietnam's top steelmaker Hoa Phat to build $2.7 billion complex
A man loads steel at a port of Hoa Phat steel mill in Hai Duong Province in Vietnam. Photo by Reuters

The country's biggest producer aims to triple its capacity to up to 6 million tons over the next decade to meet local demand.

Steelmaker Hoa Phat on Monday said it has set up a new firm to handle the construction of a massive steel complex worth $2.7 billion.

The project in the central coastal province of Quang Ngai is expected to produce four million tons of steel products per year, the company said.

The country’s biggest steel producer took over the project from Guang Lian Steel Vietnam, which had failed to start work for 10 years and finally lost its investment license last September.

The complex is forecast to generate $2 billion in annual revenue and $178 million in taxes. It is expected to create 8,000 new jobs.

Hoa Phat aims to triple its production capacity to up to six million tons over the next five to 10 years using modern blast furnace technology, general director Tran Tuan Duong told the press.

The approval of Hoa Phat’s steel project came almost a year after the country was faced with what Prime Minister Nguyen Xuan Phuc labeled as “the worst environmental disaster” caused by a Taiwanese steel mill in Ha Tinh, around 500 kilometers north of Quang Ngai.

The local unit of Taiwan's Formosa Plastics Group has delayed its planned launch of the initial phase of the $10.6 billion steel complex since the environmental disaster was brought to light in June last year.

Vietnam’s annual economic growth which has maintained above 5 percent on average since 1999 underpins ongoing domestic steel demand.

The country’s steel consumption of 200 kilograms per person is still far below the world average, which stands at 240 kilograms, according to the Vietnam Steel Association.

The association said Vietnam must increase its annual steel capacity as the country is investing heavily in infrastructure to drive growth and to match rapid urbanization.

Vietnam imported 18.36 million tons of steel products last year, an 18.4 percent increase, with imports from China still accounting for about 60 percent of the total imports, customs data showed.

The Southeast Asian country plans to put as many as 10 steel projects into operation this year in an attempt to build up domestic output to reduce its reliance on Chinese steel imports.

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