Vietnam's No. 1 Shipbuilding Enterprise Will Launch Steel Project in Malaysia

Vietnam's larger state-owned shipbuilding company-Vietnam Shipbuilding Industry Group (Vinashin) is currently facing criticism for entering the steel industry. However, Vinashin retorted that it has sufficient reasons for the steel project.

The Vietnam Steel Association (Vietnam Steel Association) has sent personnel to the relevant units and departments, requesting careful consideration of Vinashin's plan to expand the steel project in Quang Ninh Province. It is understood that the steel project has an annual output of 1 million tons. The Vietnam Iron and Steel Federation pointed out that the steel industry is not an area that Vinashin is familiar with, and the project is not feasible without sufficient capital investment.

However, Vinashin insisted on claiming that the project is a must, which can strengthen the initiative of steel plate supply, thereby enhancing competitiveness. Vinashin Chairman Mr. Pham Thanh Binh believes that Vinashin has to import steel plates from competing shipbuilding countries, which is time-consuming and costly. Compared with foreign shipbuilding enterprises, the price is not competitive and the profits are low.

According to relevant sources, the price of steel plate accounts for 20% to 25% of the cost of the entire ship. If it includes mechanical equipment parts, it is even as high as 90%. Mr. Pham Thanh Binh also pointed out that if the shipyard buys steel from domestic manufacturers, it can save 100 million pounds a year and the price can be reduced by 20%. But he also admitted that Vinashin is facing a shortage of funds, and that capital injection is needed to carry out steel projects. After the project is completed, Vinashin has a 100% investment share and is operated independently by the group.