Steel industry proves to be a boon for investors

10/09/2007 -- 9:29 PM

Ha Noi (VNA) – With an annual growth of 40 percent, Viet Nam’s steel Industry is becoming a beacon for foreign investment. After successfully hooking up on joint ventures in the northern port city of Hai Phong and Ho Chi Minh City, the Posco group from the Republic of Korea (RoK) made a ground breaking on a steel plant in Phu My 2 Industrial Zone in the southern Ba Ria-Vung Tau province in August. Construction of the 1.13 billion USD Posco Viet Nam plant, which will be capable of churning out 3 million tonnes of rolled steel per year, is scheduled to begin operations by late 2009 and to generate jobs for 10,000 workers. The Viet Nam Shipbuilding Industry Group (Vinashin) is also teaming up the RoK giant on a steel complex in central coastal Khanh Hoa province with an output capacity of 5 million tonnes of steel plates and rolled steel per year. Meanwhile, India-based Essar has signed a deal with the Viet Nam Steel Corporation and the Viet Nam Rubber Corporation to build a 527 million USD steel plant in Ba Ria-Vung Tau province, which will be capable of turning out 2 million tonnes of rolled steel per year. India’s TaTa group – one of the world’s biggest steel groups – has inked a Memorandum of Understandings to invest in a 3.5 billion USD steel complex in central Ha Tinh province with an annual output capacity of 4.5 million tonnes. The market also witnesses a fierce competition among local producers. The Thep Viet Joint Stock Company has invested 100 million USD in a steel ingot plant in Phu My Industrial Zone with a capacity of 500,000 tonnes annually. The plant, to be installed with the world’s most advanced equipment, is currently undergoing trial runs and is expected to be officially put into operation by late 2007, according to Trinh Van Nam, Deputy Director of the plant’s Management Board. The company also plans to build a 1.5 billion USD rolled steel plant by 2015 with an annual capacity of 3 million tonnes. Many other businesses, including the Hoa Sen Steel and Construction Materials Production Plant in Phu My 2 Industrial Zone, Van Loi Steel Plant in northern Bac Kan province and Dinh Vu Steel Joint Stock Company in northern Hai Phong province, have revealed their plans to build an iron and steel ingot plant to meet future demands. However, according to Chairman of the Viet Nam Steel Association Pham Chi Cuong, care needs to be taken when investing in steel in order to ensure the sustainable development of the industry so local producers remain competitive with foreign partners in the region and the world at large. The Government approved a blueprint for steel development during the 2007-2025, which requires producers to meet local demands with surplus left for more export. Under the blueprint, an estimated 10-12 billion USD will be needed to produce 12-15 million tonnes of steel ingot and 19-22 million tonnes of steel products by 2025, as local producers hope to export between 0.5-0.7 million tonnes of steel and iron products. The roadmap also focuses on investing in key projects during the given period, including the Ha Tinh Steel Complex, Dung Quat Steel Complex and expanding the Thai Nguyen Iron and Steel Company and the Lao Cai Steel Complex.-Enditem
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