Steelmakers’ inspired performance in 2014
Steelmakers’ inspired performance in 2014
Major businesses in the domestic steel industry have reported upbeat business results in 2014 thanks to well-conceived investments and strong restructuring efforts.
Leading private steel maker Hoa Phat Group (HPG) in its recently published 2014 annual report attests to a VND 3.2 trillion ($149 million) post-tax profit, topping early projections by as much as VND1 trillion ($46.7 million).
While metallurgy remained the leading segment of the HPG profile, contributing around 80 per cent to company revenue, other segments, such as home interior design and electro-cryogenics, have also been growing at a stable pace.
HPG’s general director Tran Tuan Duong has attributed the company’s stellar performance in 2014 to the tactic of ‘temporarily reducing self-extraction and taking advantage of low-cost imported ores and ores from local sources amid a nosedive in global ore prices which is forecast to continue this year’.
At present, 30-40 per cent of the total ore volume processed at the HPG steel and ore complex based in the northern province of Hai Duong is extracted by the company itself.
As global ore prices are forecast to dive further in the upcoming time, the company envisages increasing import volumes, mainly from Brazil and Australia.
“Despite the sharply growing competition pressuring the steel industry, Hoa Phat is confident to stay ahead of the competition, find the right markets and solutions for itself and capitalise on our present technology, management expertise as well as well-established value chains,” said Duong.
In its core field of steel production, HPG has set a record of selling more than one million tonnes of structural steel last year and is set to boost its sales volume by 20 per cent this year.
According to Duong, HPG is concentrating efforts to put its third kiln in operation in the first quarter of 2016.
Upon the 2016 completion of the third investment phase of the company’s steel complex, HPG is set to pass the two million tonnes margin in steel production capacity, further cementing its position as Vietnam’s leading steelmaker.
Apart from being a fruitful year to HPG, last year also marked sweeping changes at the leading state-owned steelmaker, Vietnam Steel Corporation (VNSteel).
After changing general director in April 2014 and embarking on a course of strong shake-up measures, its longstanding loss-making status was halted.
In particular, the company raked in more than VND70 billion ($3.2 million) in profits, more than double the target set in early 2014.
These figures look even more impressive within the context of VNSteel performance in 2012-2013, when the company’s cumulative losses surpassed VND800 billion ($37 million).
VNSteel’s member units posted VND151 billion ($7.05 million) in profits last year against the VND264 billion ($12.3 million) losses in 2013, whereas its affiliates registered VND696 billion ($32.5 million) in profits last year.
At the Thai Nguyen Iron and Steel Corporation (Tisco), another major player 65 per cent of whose chartered capital is owned by VNSteel, has managed to pay dividends due to strong restructuring measures.
Tisco’s average production costs were lowered by VND1 million ($46) per tonne in the second half of last year thanks to rigorous application of cost-saving measures.
Tisco reaped VND89 billion ($4 million) in profits last year while having to report more than VND290 billion ($13.5 million) in consolidated losses in 2013.
This year, Tisco has set out to implement a wide range of measures, including installing technical innovations to further save costs and boost labour efficiency.
