Market downturn leaves steel firms at a standstill

VOV.VN - A market downturn led to an array of steel firms posting negative growth figures in 2018 and has left many in an impasse.

Some of VnSteel projects have been halted due to their poor performance. 

A recent report on the performance of Vietnam Steel Corporation (VnSteel) throughout 2018 indicates that the combined after-tax profits of 38 firms owned by or affiliated to VnSteel totaled only VND1.212 trillion (US$52.97 million), equal to 79 per cent of the figure recorded in 2017.

Only 14 of the 38 enterprises achieved their targets set for 2018 and reported growth in revenues as well.

Meanwhile, Nha Be Steel JSC, Phu My Flat Steel Company, VnSteel Thang Long Coated Sheets JSC, and Binh Tay Steel Netting JSC are among the firms that failed to show signs of growth in 2018. Southern Hot Strip Steel Corporation, a VnSteel subsidiary, and eight other firms affiliated with VnSteel even suffered losses.

VnSteel has cut back on putting large-scale projects into operation in recent years while some of the corporation’s projects have been halted due to their poor performance. Therefore, they have made no positive contribution to the parent company’s volume growth and market shares.

Nguyen Dinh Phuc, general director of VnSteel, cited the sluggish state of the wider steel market as the main cause for the poor performance of many VnSteel subsidiaries and affiliates. Phuc added that another factor was the firms’ inefficient administration and market forecast.

He pointed out that many subsidiaries and affiliates of VnSteel had poor performances as their current technology and equipment are out of date. These firms encountered huge challenges when rivals had new steel plants put into use with high capacity and state-of-the-art production lines.

In 2019, VnSteel stated it will persist with its restructuring scheme with a focus on mobilizing capital and resources for the expansion of its core business.

VnSteel this year looks set to reap VND21 trillion (US$917 million) in combined revenues and VND150 billion (US$6.55 million) in pre-tax profits. Focus will be put on making amendments to VnSteel’s overall business strategy and bettering linkages with its subsidiaries and affiliates.

The general director suggested the Government, ministries, and stakeholders should advocate a collaboration between VnSteel, Viet - Trung Mining and Metallurgy Co., Ltd, and Thai Nguyen Iron and Steel Joint Stock Corporation in order to handle the shortcomings and barriers which are currently hindering the execution of a second phase of the Thai Nguyen steel project and the Lao Cai steel mill project.

Related

Steel firms strive to stay strong
Steel firms strive to stay strong

In recent months, Vietnam’s steel industry has had to compete with a rising amount of imported steel in the domestic market and faces a number of anti-dumping investigations in export destinations, reported the Ministry of Industry and Trade.

Steel firms strive to stay strong

Steel firms strive to stay strong

In recent months, Vietnam’s steel industry has had to compete with a rising amount of imported steel in the domestic market and faces a number of anti-dumping investigations in export destinations, reported the Ministry of Industry and Trade.

Hoa Phat Group moves to expand market share of steel products
Hoa Phat Group moves to expand market share of steel products

Hoa Phat Group, a leading steel maker in Vietnam, expects its steel output will rise to 3.5-4 million tonnes in 2019, a year-on-year rise of 33%, when part of its US$3-billion Hoa Phat Dung Quat steel complex becomes operational in the central province of Quang Ngai.

Hoa Phat Group moves to expand market share of steel products

Hoa Phat Group moves to expand market share of steel products

Hoa Phat Group, a leading steel maker in Vietnam, expects its steel output will rise to 3.5-4 million tonnes in 2019, a year-on-year rise of 33%, when part of its US$3-billion Hoa Phat Dung Quat steel complex becomes operational in the central province of Quang Ngai.

Vietnam wins steel dispute with Indonesia
Vietnam wins steel dispute with Indonesia

Vietnam had won a three-year dispute with Indonesia regarding safeguards on certain iron and steel products, according to the Trade Remedies Authority of Vietnam.

Vietnam wins steel dispute with Indonesia

Vietnam wins steel dispute with Indonesia

Vietnam had won a three-year dispute with Indonesia regarding safeguards on certain iron and steel products, according to the Trade Remedies Authority of Vietnam.

VND3-trillion steel wire factory approved in Quang Ngai
VND3-trillion steel wire factory approved in Quang Ngai

Investment on the Bekaert Vietnam-Dung Quat steel wire and wire rope factory in the central province of Quang Ngai has recently been approved, according to the Dung Quat Economic Zone and Quang Ngai Industrial Parks Authority.

VND3-trillion steel wire factory approved in Quang Ngai

VND3-trillion steel wire factory approved in Quang Ngai

Investment on the Bekaert Vietnam-Dung Quat steel wire and wire rope factory in the central province of Quang Ngai has recently been approved, according to the Dung Quat Economic Zone and Quang Ngai Industrial Parks Authority.