Posted on 10 Dec 2015
Hoa Sen Group has got an investment certificate from the Economic Zone Authority of Binh Dinh to build a steel mill at a cost of VND2 trillion (over US$89 million) in Nhon Hoi Economic Zone.
The authority said Hoa Sen Group will set up subsidiary Hoa Sen Nhon Hoi – Binh Dinh Ltd. Co. to undertake the project for producing steel sheets and cold-rolled steel products on 12.4 hectares.
The project is scheduled to get off the ground this month and be up and running in 2017. When in place, the mill can turn out 200,000 tons of products a year.
Hoa Sen is one of Vietnam’s leading manufacturers and traders of steel sheets and other steel products for domestic sale and export. The firm now has a number of steel factories and nearly 170 branches, retail and distribution outlets across the country.
The group obtained revenue of VND17.7 trillion and after-tax profit of VND650 billion in fiscal 2014-2015 ending on September 30, 7.27% and 44.44% higher than the targets respectively.
A source from the Dung Quat Economic Zone Authority in Quang Ngai Province said Hoa Sen Group is one of the two domestic steel producers keen on a steel project at the location of Guang Lian steel project in the zone, which has been put on hold due to a lack of capital.
Hoa Sen and Hoa Phat Group have shown interest in developing steel mills at the Guang Lian steel mill location after the Taiwanese investor said in mid-2015 that it had failed to arrange sufficient funding for the multi-billion-dollar project.
The government of Quang Ngai Province pledged to retain all the incentives stated in the investment license for the Guang Lian project if one of them takes over the project from the old investor and keep it unchanged in terms of production scale and land tenancy. The incentives would be reconsidered if there are changes to the project.
The government noted that incentives would be given to a new investor based on the revised laws on land, investment and construction as steel rolling is no longer a specially encouraged field as specified in the new investment law.
According to Quang Ngai Province, local agencies have shown preference for Hoa Phat as the group is experienced in steep production and able to arrange finances for the project.
Hoa Phat proposed building a steel mill with a capacity of four million tons a year and at a cost of US$2-2.5 billion at the location of the Guang Lian steel project. The group plans to implement the project in two phases.
