Abandoned $145mn steel plant in northern Vietnam

Jun 1st at 16:58
01-06-2017 16:58:05+07:00

 Abandoned $145mn steel plant in northern Vietnam

The ‘legacy’ of the infamous, and now defunct, state-run Vinashin not only includes a loss-making shipbuilder and its debt-ridden subsidiaries, but also a deserted multimillion-dollar steel in northern Vietnam.

 

In 2011, state-owned shipbuilding firm Vinashin officially collapsed. The company was ‘revitalized’ two years later under the new name of Shipbuilding Industry Corporation (SBIC).

The people behind the restructuring were upbeat, announcing that it would only take SBIC five years to fully recover, an outlook that proved overly optimistic.

The Dung Quat Shipyard, a Vinashin subsidiary the company was forced to transfer to other state-run companies before its collapse, is on the verge of bankruptcy in spite of a hefty US$225 million financial injection meant to boost its performance.

A number of the now SBIC-run shipbuilders are operating mere fractions their actual capacity, and the parent company reported more than VND5.4 trillion ($237.89 million) in losses for 2016.

Sharing the fate of these facilities is the Hai Phong-based Cai Lan steel mill, a VND3.3 trillion ($145.37 million) facility which broke ground in 2003 under the misguided hope of supplying hot rolled steel sheets for Vinashin’s shipbuilding operations.

In 2010, the plant entered a test run, eventually producing 5,000 metric tons of steel sheeting that met international standards. While the company was able to export 3,000 tons of its first batch to the U.S., the remainder is still gathering dust at the mill.

Along with nearly 2,000 tons of surplus steel sheeting sits $50 million worth of equipment and machinery.

The mill is operated by SBIC-owned CAILANSHINCO, which has been tasked with finding a solution to ‘save’ the costly project.

CAILANSHINCO has proposed transferring the plant, dissolving the plant, or declaring bankruptcy, all of which are infeasible as no investor would find interest in a deteriorating steel mill whose developer is besieged by huge debts, according to a company source.

Privatization is also a solution, but again “it is not easy to find a private investor with healthy financial muscles and a fondness for the hot rolled steel sheet sector,” the source said.

Below are the latest photos of the Cai Lan steel mill taken by Tuoi Tre (Youth) newspaper.

tuoitrenews



NEWS SAME CATEGORY

Logistics opportunities spur multinational M&A

A growing number of foreign logistics companies are expanding operations to and inside Vietnam through merger and acquisition deals to lower operational costs and...

Safeguards applied on colour-coated iron

The Ministry of Industry and Trade (MoIT) on Wednesday issued Decision No 1931/QD-BCT on the application of official safeguards on colour-coated iron sheets.

Fate of Vietnamese shipbuilder, once collapsed, remains uncertain

Despite being expected to start operating at a profit after three years of operation, the future of a company formed out of the collapse of a beleaguered Vietnamese...

Officials slam MoIT industrial plan

The Ministry of Industry and Trade (MoIT) should clarify weaknesses and bottlenecks in the development of industries to have a better plan on industrial...

VN dairy industry boasts potential

Viet Nam’s dairy industry is witnessing strong and rapid growth, Bui Truong Thang, Deputy Director General of Light Industry Department under the Ministry of...

Programme to support pig farmers launched

The Central Committee of Việt Nam Youth Federation and DSF Vietnam Co. on May 31 launched a programme called "Support Farmers – Price Subsidy to Consumers" to help...

Country’s aquatic products export hits $2.8 billion

The export turnover for aquatic products touched US$618 million in May, pushing the total amount in 2017 to $2.8 billion, a year-on-year rise of 10.4 per cent.

VN industrial production grows 5.7% in five months

The country’s industrial production index (IIP) surged 5.7 per cent year-on-year in the first five months this year, the General Statistics Office (GSO) reported.

30% surge in international tourists to VN

 The number of international visitors to Việt Nam in the first five months of 2017 was estimated at 5.25 million, a year-on-year surge of 29.6 per cent.

EU-funded project improves VN support industry

An EU-funded project, titled “Viet Nam’s Supporting Industries to Europe”, has reportedly improved the manufacturing capacity of the sector after three years of...


MOST READ


Back To Top