Ministry of Trade said the steel sector experienced many changes in the first six months in 2007. Vietnamese steel enterprises still do not have close association and activeness in embryo steel resource, thus 80 percent embryo steel has been imported with higher price about VND500,000 per ton in comparison with its price in China. In addition, some WTO commitments are negatively affecting this area, while electricity price and salaries are on the rise, therefore steel enterprises are trying to find new direction to reduce risk.
First, Vietnam Steel Corp (VNSTEEL) is the leading steel corporation with annualcapacity of four million tonnes construction steel and the ability to meet 60-70 per cent of total steel demand. The company gained over VND60 trillion in 10 years (1996-2006) and in 2006 alone it obtained VND10.2 trillion, two folds against 2000.With the remarkable achievement the cooperation are taking strategic steps.
In the end of June 2007 the corporation was changed into a holding company in June 21, 2007, Prime Minister Nguyen Tan Dung granted permission to operate to the holding company-Vietnam Steel Holding Company. Under the approval, the company operates in production and financial investment and other sectors, however steel production and steel products are the main businesses. The holding company and its 41 affiliates (including joint venture companies) and targets to gain VND11.2 billion in industrial production, increase steel productivity to 2.5 million tonnes, produce 1 million tonnes of ingot and buy 2.5 million tons. Vietnam Steel corporation general director Dau Van Hung said the corporation signed cooperation contracts with India’s ESSAR and other foreign partners, moreover, the company converting aims to be well prepared for equitization in 2009.
At the same time, the company also inked a comprehensive cooperation contract with Industrial and Commercial Bank of Vietnam (ICB). Under the contact, the two sides will carry out capital contribution, joint venture cooperation, and products and services provision for each side.
Besides, Hoa Phat Corporation is a dynamic enterprise seeking new investment direction. Previously Hoa Phat only produced steel for cooperation with other sectors.
At present, Hoa Phat not only produces steel, but also provides spare parts, interior, and other products.
The corporation also cooperates with other partners to execute projects in cement and hydroelectricity. It obtained hundreds of millions of US dollar in revenue. Now it has seven affiliates with a total 5,000 employees.
Recently, Vietnam-Germany Steel Pipe Joint Stock Company (VG-Pipe) issued shares to raise capital to invest in Vietnam-Germany trade centre project (VG Tower) located in North Thang Long- Noi Bai and other projects. VG-Pipe said this was a key project, and its general director Le Minh Hai added the area will house many offices and firms, so demand for leasing offices and public services for residents would be very high. In the first phase of the project the company will invest more than VND30 billion to build a five floor building on 1,500 square meters. Although the project is in progress, the company received a lot of orders from partners such as VP Bank and TL-TLS finance company.
The company will build a 16-floor building and form a trade centre in the second phase. Steel enterprises have positive changes in reducing risk and bringing sustained business to develop Vietnam’s economy.
Le Hien-Ngoc Quynh
Vietnamese
