Vietnam steel producer proceeds with giant mill despite oversupply worries
A subsidiary of Hoa Sen Group, one of Vietnam's biggest steel producers, has acquired a license to develop a VND2 trillion (US$87.48 million) mill in the central province of Binh Dinh.
Work on the factory of Hoa Sen Nhon Hoi-Binh Dinh Co., Ltd. is scheduled to start this month and complete in June 2017, with a designed capacity of 200,000 tons a year.
Last month Hoa Sen Group along with another steel giant, Hoa Phat Group, were reported to be seeking to take over a multi-billion dollar steel project in the central province of Quang Ngai, after Taiwanese investors dropped it due to financial reasons.
With their expansion plans, the giants have apparently stayed unaffected by the oversupply and cheap imports, which were believed to have driven many local producers to the verge of shutting down.
In its recent plea for the government's help, the Vietnam Steel Association said local steel output is estimated 22 million tons a year with supplies of many products already doubling local demand. It urged relevant agencies to delay 27 steel plant projects.
The association also sought the government's intervention in the increasing cheap imports from China, such as increasing tariffs.
Vietnam imported 12.62 million tons of iron and steel in the first ten months, up 34% year on year and posting the revenues of US$6.28 billion, according to official figures. More than 61% of the imports were from from China.