Alarm bells go off on steel investment strategy

17/09/2007 -- 5:17 PM

Ha Noi (VNA) – Foreign investment flooding into Viet Nam’s steel industry since the beginning of the year has had analysts worried about shortages in the world market caused by China’s vicarious appetite for building materials. However, a small group of observers have called for the industry to tread with caution. Five metallurgy projects have already been granted licenses since the beginning of the year while another local company signed with its partners to build a 5-10 million tonne steel complex, according to the Viet Nam Steel Association (VSA). According to the VSA, Viet Nam has set a target of churning out between 15-18 million tonnes of steel during the 2007-2015 period, and only needs one or two metallurgy plants over the next 10 years. If, too many spring up, serious gluts may hit the industry. Investors have also purchased equipment from China to reduce costs, which are often substandard and can cause serious environmental change, said the VSA. In an attempt to solve the problem, the VSA has asked for a Prime Minister appraisal to ensure the sustainable development of the industry.-Enditem
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