Hoa Phat Steel is one of the leading steel manufacturers in Vietnam which operates a 2 MnT integrated iron and steel works in Kinh Mon district, Hai Duong province of Vietnam.
According to the reports, the company is set to speed up the construction of the two phases of Hoa Phat’s Dung Quat steel complex in the central province of Quang Ngai’s Dung Quat Economic Zone.
The company took over the project from Taiwanese investors who failed to complete the project within the promised time frame.
What happened in the past?
In September 2006, the Dunag Quat steel complex project was initiated by Taiwanese steel giant, Tycoons Vietnam Co. Ltd with a planned investment of USD 556 million and a completion target of 36 months. Later on another Taiwanese steel major, E-United Group acquired 90% stake in the project and the two groups raised the investment amount to USD 3 billion in 2008 and then USD 4.5 billion in 2010. Along with the investment, the project’s manufacturing capacity was also increased from initial 2 MnT to 7 MnT.
However, in 2011 when the investors asked for permission to raise both the cost and capacity of the factory, the authorities rejected the request, saying the investors failed to prove that they could provide enough funding.
The next year Japan’s JEF Steel Corp. showed interest in the project but backed out after studying its feasibility for two years. After that, E-United proposed to cut the project’s investment to USD 2 billion. But, in June 2015 it told the provincial authorities that it could not fund the project.
Subsequently, in December 2015, the Dung Quat Economic Zone Management Authority carried out an inspection of the project grounds and requested the investors to voluntarily liquidate its assets.
In March 2016, the two investors once again committed to restarting the project with the total capital of USD 2.2 billion, the output of 5 MnT per year and completion period of 42 months. However, after numerous further delays, the local authorities lost trust in the investors and feasibility of the project.
When Hoa Phat came in to picture?
In Feb’17 Hoa Phat officially received investment certificate from the authorities to revive the ill-fated project. According to the plan, the project is set to have a total manufacturing capacity of 4 MnT involving the production of long steel and steel coils. The same is expected to be completed in two phases.
In the first phase, a manufacturing line with the annual capacity of 600,000 tonnes will come into operation in May 2018, and the remaining lines will start operation two months later. In the second phase, a manufacturing line for hot rolled coils with an annual output of 2 MnT per annum is expected to be completed by 2020. According to the plan, half of the flat steel products from the facility will be used by Hoa Phat’s steel sheet manufacturing plant, and the other half will be distributed in the domestic market.
Also as per the market reports, after the entire Hoa Phat Dung Quat steel complex comes into operation, one-fourth of its products will be exported and the remaining part will be distributed in the central and southern domestic markets.
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