Vietnam’s (Steel) Outlook

The 10 million MT local demand was forecast by the government to reach in 2010 but this was already achieved in 2007. The next target is 20 million MT in 2020. Going by their rate of expansion, and barring major and prolonged market crisis, this is very much achievable.

At present, the government has already given a go ahead business permit approval (including the necessary environmental permits and clearances) to 5 big companies to undergo and build integrated iron and steel plants by way of blast furnaces. These are PT Essar and Tata Steel from India, POSCO from Korea and the Tycoon Group from Taiwan. It has likewise given mining permits to develop and extract iron ores in at least 2 different locations identified to have enough reserves of this raw material.

Downstream, all the plants we visited and similarly the others too are poised to go on further expansions. Their sites are ready, their plans are in place but got stalled only by the present global financial crisis. By their own admission however, they are upbeat that there will be turnaround sooner that most expect.

Consider this, just days ago, at the height of the crisis, Ton Nan Kim (which we visited) just bought and put up a company in New York and immediately listed it in the Dow Jones Stock Exchange. This new company now will be their mother company while their plant operation is in Vietnam.

With such optimism, vision, political will, etc., Vietnam indeed will become one of the tiger economies in this part of the world.