Hoa Phat receives investment certificate for $2.65 billion steel project

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Báo Đầu Tư English - 3 month(s) ago 6 readings

On February 6, the management board of the Dung Quat Economic Zone and other industrial zones in the central province of Quang Ngai held the ceremony to award to Hoa Phat Dung Quat Steel, a subsidiary of Vietnam’s leading steel producer Hoa Phat Group (HoSE: HPG) the investment certificate for the Hoa Phat Dung Quat iron and steel complex.

Hoa Phat receives investment certificate for $2.65 billion steel project

The project was proposed by Hoa Phat on the basis of taking over the Quang Ngai Guang Lian steel project that had been approved 10 years ago but had been lying idle. The project is one of the projects in the masterplan on production and distribution of steel from now to 2025 approved by the Minister of Trade and Industry on January 31, 2013.

The project has investment of VND60 trillion ($2.65 billion) with capacity of four million tonnes a year. The main products are construction steel and rolled steel to serve manufacturing. It is going to use the technology that was 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 capacity of 2 million tonnes a year. Hoa Phat expects to earn revenue of $2 billion a year from the project after it fully comes into operation and pay to the state budget VND4 trillion ($177 million). The project is going to employ a total 8,000 workers.

In 2016 Hoa Phat earned revenue of VND34 trillion ($1.5 billion), and net profit of VND6.6 trillion ($292 million), an increase of 34 per cent 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’s 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 revenue and profit of the company.

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By Hong Anh

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