Steel News

Associated with the development of the business, recently, Mr. Tran Dinh Long, Chairman of the Board of Directors of Hoa Phat Group, decided to invest in three new projects in the Nam Phu Yen Economic Zone with a project scale of over 120,000 billion dong.Currently, Hoa Phat Group is the largest steel manufacturer in Southeast Asia, with more than 30 years of experience. After a period of learning, researching and discussing with the leaders of Phu Yen province, Hoa Phat Group decided to sign a memorandum of understanding to invest in three projects in the South Phu Yen Economic Zone. Projects include: the original beach port; investing in construction and trading in the infrastructure of Hoa Tam Industrial Park; and the Hoa Phat Iron and Steel Complex Project in Hoa Tam Industrial Park. The total expected investment capital is over 120,000 billion VND.Currently, Hoa Phat's production capacity is 8.5 million tons per year. Of which, high-quality steel billets and construction steel are 5.5 million tons and hot-rolled steel coils are 3 million tons per year. Hoa Phat Group is currently leading in Vietnam in terms of market share of construction steel, steel pipes and the top 5 largest coated steel sheet manufacturers. It is also the only Vietnamese enterprise that can produce HRC steel, prestressed steel cables and many other high-quality steel products.Along with that, Hoa Phat Group is also implementing the Hoa Phat Dung Quat 2 Iron and Steel Production Complex project in Quang Ngai, with a design capacity of 5.6 million tons of hot-rolled steel per year. It is expected that when the project is completed in 2025, Hoa Phat's annual crude steel production capacity will reach over 14 million tons, equivalent to the top 30 largest steel enterprises in the world.Regarding the business situation, in 2023, Hoa Phat Group will reach VND 120,355 billion in revenue, down 16% over the same period last year. Profit after tax is 6,800 billion VND, completing 85% of the year plan. Hoa Phat leaders said that in 2023, it will produce 6.7 million tons of crude steel, down 10% compared to 2022. Sales output of HRC steel products, construction steel, high-quality steel and steel billets reached 6.72 million tons, down 7%. In addition to traditional steel product lines, Hoa Phat Group has invested in deep processing, promoting the production of high-quality steel to serve domestic and export needs. The Hoa Phat steel export market has expanded to 39 countries and territories worldwide.Exporting helps Hoa Phat Group diversify consumer markets while contributing to foreign exchange earnings and balancing Vietnam's trade balance. Hoa Phat is still leading the market share in Vietnam in construction steel and steel pipes and is the only Vietnamese enterprise that can produce HRC steel, prestressed steel cables and many types of high-quality steel.With Hoa Phat Group investing in an additional factory in Phu Yen, it will increase the group's output, helping Hoa Phat firmly hold its position as the leading steel manufacturer in Southeast Asia. Besides, it also helps increase the position of Vietnam's steel industry in the world steel market.

In recent times, the Pomina Steel Corporation project has garnered the attention of many people with an impressive net loss figure of 648 billion dong. This is one of the significant investment projects in the steel manufacturing industry in Vietnam, and it has experienced some important fluctuations.Pomina Steel Corporation continues to incur losses in the third quarter of 2023Previously, Pomina was the largest steel producer in Vietnam, holding a 17% market share, while Hoa Phat accounted for only 12%. However, with its strategic vision, along with low sales revenue in the challenging economic environment and high cost of goods sold, Pomina Steel Corporation lost market share to domestic competitors like Hoa Phat, Hoa Sen and others.In 2023, Pomina Steel Corporation set a revenue target of 9,000 billion dong and a post-tax profit of a loss of 150 billion dong. However, the company continued to incur losses in the first three quarters of the year, surpassing the set target.Recently, Pomina Steel Corporation has released its financial report for the third quarter of 2023, which showed a consolidated net revenue decrease of over 83% compared to the same period last year, down to 503 billion dong due to reduced sales volume and lower selling prices. The company continued to operate with a cost higher than revenue, resulting in a gross loss of 5.2 billion dong compared to a gross loss of 578 billion dong in the same period. As a result, in the first nine months of 2023, Pomina Steel Corporation recorded a total revenue of 2,948 billion dong, a 74% decrease compared to the same period last year, and a post-tax loss of 647 billion dong, while it incurred a loss of 707.5 billion dong in the same period of the previous year. Consequently, just within the first nine months of 2023, the losses reported by Pomina Steel Corporation significantly exceeded the initial plan.Not only is Pomina Steel Corporation running at a loss, but its financial situation is also alarming. The company has reported negative operating cash flow of 253 billion dong compared to the same period last year. Additionally, the company has made investments of 5.19 billion dong and reported a financial cash flow of 56 billion dong. The company has also used short-term capital amounting to 4,199 billion dong to finance its long-term assets. The reasons leading to Pomina's loss of 648 billion dongThe net loss of 648 billion dong has been surprising and contentious. There are several reasons that have led to this situation:Fierce competitionThe steel product market has had to deal with fierce competition, particularly from imported steel products, especially those from countries like China. This competition has exerted pressure on both prices and profits for Pomina Steel Corporation.Increased raw material pricesThe prices of steel production raw materials, such as iron ore and coke, have risen significantly, affecting the cost of steel products.Real estateThe stagnant real estate market, along with a sharp drop in steel consumption and revenue during the period, has led to a significant decrease in Pomina Steel Corporation revenue. This, coupled with high fixed costs and interest expenses, has resulted in substantial losses in the past quarter.Additionally, the shutdown of the Pomina 3 steel plant has incurred various costs, including interest expenses. It is expected that this steel refining plant will resume operations in the early fourth quarter of 2023, immediately after a private equity issuance to investors.With Pomina Steel Corporation net loss of 648 billion dong, it presents a significant challenge, but it also provides an opportunity for the corporation to refine and grow. Currently, Pomina remains one of Vietnam's leading construction steel manufacturers. If you are interested in purchasing Pomina's construction steel products, please feel free to contact us HERE.