Investors continue pouring money into steel industry
30-09-2015 10:02:57+07:00
Investors continue pouring money into steel industry
Investors are still interested in steel projects despite the warning about the oversupply of structural steel and protests from environmentalists.
The construction of the Nghi Son general international port capitalized at VND5.8 trillion kicked off last week. This is an important part of the project of running a steel complex, expected to produce 7 million tons of steel a year.
Nguyen Bao Giang, chair of Nghi Son Steel, said the company had built necessary infrastructure items on an area of 210 hectares. The site clearance work alone costs VND2 trillion.
As the chair of the management boards of six steel enterprises, including Nghi Son JSC, Giang expressed his aspiration of building ‘an enterprise with regional stature’.
With more private investors pouring money into a large-scale steel project, the industry remains attractive to investors, even though the steel complex developed by Taiwanese Formosa in Ha Tinh province, a big rival, is about to operate.
Formosa will put the first blast furnace of the Son Duong Steel and Deep-water Port Complex project into operation in May.
The investor plans to raise the total investment capital to $27 billion to develop the largest steel complex in South East Asia by 2020.
Formosa Ha Tinh plans to churn out 22.5 million tons of raw steel and run 32 harbors at Son Duong port, through which 85 million tons of goods will pass through every year.
Formosa’s project will focus on making hot rolled steel and high-quality steel fibers, while there would be only 467,000 tons of square ingot steel, 40 percent of which would be for export and the remaining for domestic consumption.
The information was released in the Ministry of Industry and Trade’s (MOIT) report submitted to the government in mid-2014, when it was asked to assess the steel manufacturing industry, as worries were raised that the Taiwanese project would hurt Vietnamese enterprises.
While economists are concerned that foreign invested projects would affect Vietnamese production, Vietnamese enterprises have remained calm.
Tran Dinh Long, chair of Hoa Phat Group, a large Vietnamese owned steel manufacturer, said businesses in a market economy have to accept competition.
Hoa Phat produced 924,000 tons of finished products of different kinds in the first eight months of the year, an increase of 48 percent over the same period last year.
