Technology investment needed for steel sector

10:54 | 03/01/2019 Science - Technology

(VEN) - To deal with the trade defense mechanisms applied by steel importing countries, the Vietnamese steel industry must promote investment in technology to ensure sustainable development in the long term.

According to the General Department of Vietnam Customs, Vietnam exported 654,330 tonnes of steel worth US$453.25 million in October 2018, an increase of 35.8 percent in volume and 39.9 percent in value compared to the same month last year. As a result, in the first 10 months of 2018, Vietnam’s total steel exports reached 5.24 million tonnes, earning US$3.84 billion, increasing 38.2 percent in volume and 53 percent in turnover from the same period last year.

Almost all markets saw a sharp increase. The 10-month export value has already exceeded by US$200 million last year’s export value for the whole year.

Vietnam Steel Association Deputy Chairman Nguyen Van Sua said that a strong increase in exports is good news, showing that domestic businesses have improved their competitiveness and raw material inputs are ensured, reducing the adverse effects of trade defense mechanisms.

Steel businesses have achieved higher profits thanks to the completion of their value chains, helping save production costs and improve gross profit margins. For example, in the second quarter of 2018, the Hoa Phat Group saw an increase of revenues and profits of 34 percent and 43 percent compared to a year ago. The Hoa Phat Group invested in the Hoa Phat Steel Complex in the Dung Quat Economic Zone, which manufactures competitive high-end products.
However, Nguyen Van Sua said the Vietnamese steel industry is still heavily dependent on imported raw material.

Although the industry has seen fast growth in recent years, the competition with foreign rivals is still based on the price factor.

Competitive pressure on Vietnamese steel businesses is expected to grow. In order to survive and develop, it is necessary to promote technology investment and improve competitiveness. Businesses that have completed their value chains will develop strongly.

In the future, there will be differentiation in the steel industry. Large companies such as the Hoa Phat Group and Viet

Duc Steel will benefit strongly, while small businesses will face difficulties due to the application of additional trade

defense mechanisms by importing countries.

Kim Chi