Vietnamese steelmaker Hòa Phát Group (HPG) plans to add four blast furnaces to its operations by 2021. It could become Vietnam’s leading steelmaker once its crude steel output capacity increases to 8mn mt per year after its Dung Quat project begins operations, HPG noted in a company statement.
The steelmaker could announce a 2020 revenue guidance ranging in VND85,000-95,000bn and after-tax profit estimates of about VND9000-10,000bn, in its June meeting. Furthermore, the company plans to begin its new hot rolled coil (HRC) production in September with an estimated output of 500,000mt per year to meet the country’s rising demand for HRC.
By 2021, Hoa Phat would be importing 12-13mn mt of ore but expects to save more on input costs by taking advantage of seaports amid increased competition.
The company holds around 31.4pc of market share and expects its financial position to remain healthy by the end of 2020 with its net debt issues getting resolved by the end of this year.
HPG’s share of construction steel increased to 31.9pc in Q1 2020 with an output of nearly 733,000mt after excluding steel billets while its finished steel exports grew by 74.8pc to 135,000mt over the same period last year. It exported around 350,000mt of steel billets last quarter to markets like China and other Southeast Asian countries. However, the company now plans to focus on the domestic market, it indicated.
The company also sold nearly 145,000mt of steel pipes last quarter. In March, HPG supplied 486,000mt of finished steel products and steel billets to domestic and foreign markets.
The steelmaker’s revenue in Q1 2020 rose by 28pc to VND19.5tr ($835.9mn) from the same period a year ago while its post tax profit grew by 27pc to VNĐ2.3 tr during the same period.
Public sector investment has increased in Vietnam, with a package of VND700,000bn mainly disbursed into bridges and roads recently because of which steel consumption is expected to be relatively high in the country.