In order to learn about difficulties and prospect of Vietnamese steel enterprises, VIB Forum had an interview with Mr Nguyen Van Binh, chairman cum general director of Vietnam-Japan Steel Group. He is also the member of the 12th national assembly, the National Assembly Economic Commission, the Central Committee of the Vietnam Father Front and the 13th Haiphong City People’s Council.
Since the company’s establishment, what did you have forecast about steel market to have a proper orientation for the company?
Like many other people, I realise a rising demand for infrastructure construction in the country’s new development period. Construction steel demand will see a soaring increase. Vietnam-Japan Steel Group is luckily the last enterprise granted investment licence in the sector in Haiphong City. As for me, this is a unique and big business opportunity. This is represented on the graph of rolled coil steel production in the past ten years. In 1998, the country rolled only more than 1.07 million tonnes of steel, the figure rose to 1.7 million tonnes in 1999, 1.58 million tonnes in 2000, 3.28 million tonnes in 2004 and over 3.65 million tonnes in 2006. The figure is expected to reach 4.3 million tonnes this year.
You are talking about advantages, so what do you think about difficulties, and pressing issues of the steel sector?
At present, Vietnamese steel producers self supply some 40 per cent of steel ingot output. Due to the insufficiency in steel ingot source, domestic steel price has kept unstable. In the past several months, the price of imported ingot increased to US$530/tonne from US$485/tonne. In September, China amended its policy to limit exporting semi-finished products and raise ingot export tax to 25 per cent. Although the Vietnamese government decided to reduce ingot import tax by 2 per cent, the limited supply resulted in increasing ingot price to the record level of US$600/tonne. The situation is likely to push steel price to over VND12 million per tonne, making difficulties for both consumers and producers. Soaring steel price has created a great pressure for us for fear of imported finished steel flooding into the country.
What do you think about the fact that recently POSCO, the world’s third largest steel group has sought licence to build steel plant in the south, and Tycoon Vietnam has raised its investment capital to US$1.8 billion in the central?
I think this is a good signal for our economy, but also a great challenge for local steel producers. In order to ensure the competitiveness capacity, we have the only way to mobilise and maximise high-quality labour force, and further reduce production cost, improve service quality and best meet customers’ demands.
In the government’s development plan for steel sector until 2010, steel demand in the country can reach over ten million tonnes per year, doubling the current figure and some 25 million tonnes by 2025. This is a prospect orientation for the steel industry in general and Vietnam-Japan Steel Group in particular.
Vietnam-Japan Steel Group was set up in October 2001, with annual production capacity of 240,000 tonnes of products of all kinds from steel 6 to steel 41. The Group’s steel products were acknowledged to meet the standard of Japan (JIS), Vietnam (TCVN), the U.S. (ASTM) and the UK (BS). Vietnam-Japan steel has companioned with many the country’s key construction including Thanh Tri Bridge, Hai Van Tunnel, Vinh Tuy Bridge, the National Conference Centre. Vietnam-Japan Steel Group has been developing five more projects in technology, transport and trade sectors.
Vietnam-Japan Steel Group reports a revenue of between VND400 billion and VND600 billion each year, contributing VND30 billion -VND50 billion to the state budget. The company creates jobs for 500 direct workers and thousands of indirect workers, with average salary of VND2.5 million - VND3 million/labour/month. The steel producer also contributes between VND300 million and VND400 million each year to social activities.
Reported by Huyen Nhi
Vietnamese
