News Room - Steel Industry

Posted on 01 Feb 2010

Steel industry questions Vinashin’s competence

The Vietnam Steel Association has requested the government to conduct an inspection into steel projects of state-owned shipbuilder Vinashin, saying they are out its area of expertise and therefore ineffective.

 

Vinashin has expanded its business to the steel sector for many years, but its projects have not been implemented successfully despite looking promising on paper, Vietnam Steel Association Chairman Pham Chi Cuong was quoted by online news service VietNamNet as saying Friday.

 

“Vinashin is a shipbuilding company and steel manufacturing requires expertise that it doesn’t have. As a result, its steel projects have not been effective,” Cuong said.

 

A steel plant project in the northern province of Yen Bai, for instance, began construction in 2007 but is still to start production. Vinashin also broke ground for another project in Ninh Thuan Province in 2007 and the project has not made any progress since.

 

The inspection proposal came after Vinashin, or Vietnam Shipbuilding Industry Group, asked for government’s consent to nearly triple the design capacity for a hot-rolled steel plant to 1 million tons per year.

 

Vinashin said it’s necessary to raise the capacity of the plant in Quang Ninh Province as the demand for hot-rolled steel plates in the local shipbuilding industry would surge.

 

Cuong said the project was started in 2002 and should have been completed two years later, but has been constantly delayed since then.

 

“And now Vinashin wants to raise its capacity,” he said. “It will cost a billion dollars to do so. After looking at their other projects, I don’t think Vinashin is capable.”