Hoa Phat Group is accelerating the construction of the two phases of its $3 billion Hoa Phat Dung Quat steel complex. The Vietnamese complex was taken over by the group after Taiwanese investors failed to develop the central province project.
The initial project was licensed in September 2006 to Taiwanese investors. By 2008 the E-United Group had a registered investment amount of $3 billion and $4.5 billion in 2010. The facility’s manufacturing capacity plan was increased to 7 million mt annually, 5 million mt higher than the initial design. By 2016, the project was scaled back to 5 million mt annually, but local authorities lost trust in its completion. Hoa Phat Group then received the investment certificate to revive the project.
According to the plan, the first manufacturing line in phase one will come into operation in May 2018 with 600,000 mt annual capacity. The remaining lines of the first phase are expected to start operations two months later.
Construction of the second phase of the complex was started in 2017 and is ongoing. The hot rolled flat steel facility is expected to generate 2 million mt of hot rolled flat steel products, making Hoa Phat the second hot rolled flat steel maker in the country, following Formosa.
According to Tran Tuan Duong, general director of Hoa Phat Group, half of the 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. He added that once the full Hoa Phat Dung Quat steel complex comes into operation, one fourth of its products will be exported and the remaining part will be distributed to the central and southern Vietnam markets. Speaking in a March 2018 shareholders’ meeting he added that Hoa Phat will be highly competitive at one third the cost structure since it takes Formosa $1,700/mt, while the figure for Hoa Phat Dung Quat steel complex is only $500/mt.