Vietnamese steel maker Hoa Phat Group is to build a $2.7bn manufacturing complex in the central province of Quang Ngai as part of a government plan to build 10 such facilities to reduce the country’s dependence on Chinese imports.
Tran Tuan Duong, the general director of Hoa Phat, said the plant would have an initial capacity of 4 million tonnes a year, later rising to six. This would reduce the 18 million tonnes of steel products that Vietnam presently imports, 60% of which are from China.
Hoa Phat’s complex is forecast to generate $2bn in revenue and $178m in taxes. It is expected to create 8,000 jobs, according to local media.
The government’s plan to expand domestic steel production comes amid problems with two Taiwanese firms in launching new steelworks in Vietnam.
Taiwanese company Guang Lian Steel’s $4.5bn Dung Quat project was abandoned in June 2016, 10 years after its licence was granted, owing to the company’s failure to make progress with the works. Â
Another Taiwanese steel project was delayed following what the government of Vietnam described as it "worst ever" environmental disaster. Formosa Plastics’ $10.6bn plant at Ha Tinh, about 500km north of Quang Ngai, was responsible for a release of toxins in June last year that killed more than 100 tons of fish and devastated the economies of four provinces.
Formosa later paid $500m in compensation.
Image: Hoa Phat’s steel pipe line (Hoa Phat)
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