Vietnam’s Hoa Phat Group plans to manufacture shipping containers to address the severe container shortage and increase the demand for hot-rolled coil (HRC).
The company indicated in a statement on Monday that its two container production sites, Haiphong in North Vietnam and Ba Ria-Vung Tau in the South are expected to consume 1 mn mt or 20pc of the HRC steel produced by the steelmaker. The company plans to begin operations at both plants by late 2022.
Hoa Phat has started recruiting for employees and said that through this project, logistics firms will have another supply source for containers, which has been impacted because of the strong reliance on Chinese suppliers and the impact of the COVID-19 pandemic on trade flows.
Large shipping entities such as Maersk, MSC, COSCO, CMA CGM, Hapag-Lloyd, ONE, and Evergreen are primary owners of containers. Hoa Phat hopes to provide more options for its own materials and logistics, and for Vietnam exporters. More container access by local and regional players who wish to move inventory is also expected to benefit consumers throughout Asia.
In January, Vietnam’s ministries of Industry-Trade and Transport were requested to investigate the reason for the spike in container prices by Deputy Prime Minister Trinh Dinh Dung. The difficulties reported in import and export activity had the Prime Minister requesting harsh sanctions against those violating competitive price regulations and for the Ministry to set prices if necessary. Hoa Phat’s projects are expected to have government endorsement.
Self-reliance for logistics
Hoa Phat recently purchased two 90,000mt modern engine vessels. The Japanese-made vessels will be primarily used to transport coal and iron ore but may also be engaged for other bulk vessel needs, Hoa Phat noted. Further investments in logistics and transportation is expected to help the Vietnamese steelmaker better manage shipping costs.
Mr. Doan Quang Thinh, director of Hoa Phat Shipping JSC, noted that the company plans to buy more ships to service the Dung Quat 2 project, and support the flow of raw materials, equipment, and machinery which is expected to at least double against present flows.