Inferior steel imports weaken sector

According to the Vietnam Steel Association (VSA), the volume of low-quality imported iron has risen abruptly in recent years. Some 1,755 tonnes of coated steel was locally marketed last year.

In this year’s first nine months, imported iron from China into Vietnam rose sharply, holding over 30% of the market share.

More critically, counterfeit and low-quality products are seen nationwide now, though in past years, they were mainly restricted to certain localities such as Thanh Hoa, Haiphong, Bac Ninh, Bac Giang, and Thai Nguyen.

Local producers reportedly incurred losses of VND935 billion (US$43 million) in this year’s first eight months due to the overwhelming presence of counterfeit and low-quality items.

The steel sheet brand of the Hoa Sen Group is being imitated the most throughout the domestic market, as this steel giant currently controls almost 40% of the domestic market share of iron and steel products.

Counterfeit items reportedly cost Hoa Sen about VND118 billion (US$5.4 million) last year, equal to a loss of 2.6% market share.

Not only leading players like Hoa Sen, Nam Kim, or Dong A, but new brands such as Vnsteel Thang Long have also fallen victim to the harmful repercussions of widespread counterfeiting.

“It took us a great deal of money and effort to carve out a niche in the market for the Thang Long and Viet Y steel brands. However, once these products secured an established reputation, counterfeit versions of our products began to appear with increasing frequency and volume, misleading consumers and hurting our operation,” said Trinh Dinh Hung, deputy general director of Vnsteel Thang Long JSC.

Hoa Sen’s deputy general director Vu Van Thanh stressed that firms urgently needed support from government agencies such as the Ministry of Industry and Trade (MoIT), or the Ministry of Natural Resources and Environment to tackle the massive import of counterfeit and low-quality steel items into Vietnam.

“Although authorised government agencies have joined the fight against counterfeit goods, the situation has not improved much. That is partly because the steel market is managed by several different agencies, none of which can be held accountable for controlling the quality of steel products,” said Do Thanh Lam, deputy head of the MoIT’s Market Management Department.

“In addition, businesses need to supply relevant management agencies with the technical specifications and standards of their products to help the agencies differentiate between genuine and imitated versions of their goods,” Lam added.

VSA’s deputy chairman Nguyen Van Sua said that the VSA had proposed imposing higher import duties on steel items that were oversupplied in the local market (such as painted steel) to limit such massive import volumes.

“Our proposal was accepted by the General Department of Customs, but enforcement will come a bit later, in 2017, as we need to adhere to international commitments,” Sua said.