Brian Jeffrey
Hoa Phat Group Advances Projects in Phu Yen
On November 25, Hoa Phat Group announced it is finalizing land clearance and project implementations in Hoa Tam Industrial Zone, part of the Nam Phu Yen Economic Zone in Phu Yen province. A key undertaking is the Hoa Phat Steel Production Complex.
This complex is set to produce high-quality steel for mechanical engineering applications, including rail steel, plate steel, structural steel, shape steel, and special bar quality (SBQ) steel.
Exploring European Steel Technologies
In October and November 2024, Hoa Phat’s president, Tran Dinh Long, and a team of technology experts visited European rail steel production facilities. They gained insights into the organization of steel mill operations, technical equipment arrangements, and quality control measures.
This included sourcing clean raw materials from iron ore, vacuum refining to achieve the highest metal purity, and implementing advanced quality control systems including ultrasonic testing for rail defects and rail straightening technologies. Such measures aim to ensure the highest standards of product quality.
Collaboration and Training Initiatives
Hoa Phat is currently negotiating technology partnerships with global leaders in rail steel manufacturing and suppliers of steep rail production equipment. Additionally, they have partnered with the Hanoi University of Science and Technology (HUST) for specialized training on high-quality steel products, focusing on steel for automotive tires, electrical engineering (silicon steel), and rail applications for high-speed trains.
Commitment to High-Speed Railway Project
The group is committed to supplying 6 million tons of various steel types for the North-South high-speed railway project, ensuring their products meet international quality standards. They emphasize timely delivery and competitive pricing against imports.
Financial Performance and Market Standing
Reporting a revenue of $4 billion in the first three quarters, Hoa Phat Group experienced a dramatic 51% rise in after-tax profit for Q3 2024, which increased from VND2 trillion to VND3.022 trillion. Their total profit for the first nine months reached VND9.210 trillion, achieving 92% of their annual target.
These results come amid rising steel prices and demand, with steel accounting for 85% of HPG’s profits, complemented by their agriculture sector.
In Q3, the company recorded over $34 trillion in revenue, marking a 19% year-on-year increase. For the first nine months of the year, total revenue exceeded VND105 trillion ($4 billion), representing a 23% rise from the previous year, fulfilling 75% of their 2024 revenue plan.
The group contributed VND10 trillion to the state budget within the first nine months of 2024, surpassing the total amount contributed in all of 2023.
Challenges Faced and Future Plans
Reflecting on a challenging 2022, where revenue dropped by 5%, Hoa Phat saw a decline in profit and revenue again in 2023, primarily due to falling steel prices. Nevertheless, they are moving forward with plans to establish the Hoa Phat Dung Quat 2 steel complex, with a projected output of 5.6 million tons of hot rolled coil steel annually.
Despite being the largest steel manufacturer in the country, Hoa Phat faces significant competition from Chinese imports. The Vietnam Steel Association notes a surge in China’s exports due to decreased domestic demand and an increase in low-cost steel shipments globally, leading to heightened protectionist measures in various markets.
Reports indicate that China’s steel exports rose by 21.3% in August, compounding the challenges faced by domestic manufacturers.
