Vietnam steels up to deal with competitive pressure

14:31 | 26/11/2017 Industry

(VEN) - The Vietnamese government invests heavily in the steel sector, but most of the enterprises are small and medium-size and their ability to compete with Chinese imports is weak.

vietnam steels up to deal with competitive pressure

Trade defense measures imposed on some steel products of coated steel, alloyed steel and steel bar have helped reduce imports, but producers of construction steel and others are still facing fierce competition from imported products to maintain their market shares.

According to the Vietnam Steel Association, the steel sector’s total production capacity stands at 30 million tonnes a year, and is rated as the top in Southeast Asia. However, compared to the actual demand of the domestic market, supply far exceeds demand. As a result, the average capacity of the steel sector has been only at 50-60 percent.

Nguyen Thi Dung, board chairwoman of the Nam Hai Group, said Vietnamese steel has to compete in prices with the same kinds of Chinese products. Due to limited financial capacity, many Vietnamese enterprises have only invested in small-scale production lines, causing high fuel consumption and high costs. Therefore, their products are non-competitive.

Nguyen Thi Le Hoa from the Vietnam National Productivity Institute said that the technological level of many Vietnamese enterprises is limited, leading to non-competitive products. To resolve the problems, enterprises need to conduct technology innovation, increase competitiveness and improve product quality.

The domestic steel sector has been struggling to cope with massive imports of Chinese steel due to its competitive prices. To compete in prices with the same kinds of Chinese products, Vietnamese enterprises need to innovate their technologies.

Nguyen Thi Le Hoa said Vietnamese enterprises also need to change management methods to increase productivity and reduce production costs. Some enterprises have improved product quality, but they are mainly large enterprises, such as Vietnam Steel Corporation, Hoa Sen Group and Hoa Phat Group.

The state needs to create favorable conditions for economic sectors to access the steel market in order to ensure more effective administration and better management of national resources.

Thu Huong