Hoa Phat receives investment certificate for $2.65 billion steel project

The project was proposed by Hoa Phat Dung Quat Steel, a subsidiary of leaving Vietnamese steel producer Hoa Phat Group (HoSE: HPG), on the basis of taking over the Quang Ngai Guang Lian steel project that had been approved 10 years ago but has been lying idle. The project is part of the development master plan of steel from now to 2025, approved by the Minister of Industry and Trade on January 31, 2013.

The project has an investment value of VND60 trillion ($2.65 billion), with a capacity of four million tonnes a year. The main products will be construction steel and rolled steel to serve manufacturing. It is going to use technology earlier used by Hoa Phat in its Hai Duong plant, which the company affirmed to be environmentally-friendly.

The project is divided into two phases to be completed in four years. The first phase has a capacity of 2 million tonnes a year. Hoa Phat expects to earn $2 billion in revenue a year from the project after it fully comes into operation and contribute VND4 trillion ($177 million) to the state budget. The project is going to employ a total 8,000 workers.

In 2016, Hoa Phat earned a revenue of VND34 trillion ($1.5 billion) and a net profit of VND6.6 trillion ($292 million), increases of 34 and 89 per cent on-year, respectively. These figures are the highest since Hoa Phat’s establishment.

During the year, the company produced a total of 1.8 million tonnes of construction steel, making up 21 per cent of the country total. Hoa Phat is involved in a number of other fields, such as production of office equipment and agriculture, but steel is the main area of operation, contributing 80 per cent of the company’s revenue and profit.

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