Formosa Ha Tinh Steel suffers 2022 loss of $320 mln in Vietnam

Formosa Plastics Group’s turnover from its Vietnam activities fell 12% year-on-year to TWD158.1 billion ($5.1 billion) in 2022, and Formosa Ha Tinh Steel posted a loss of TWD10 billion ($322 million), according to the Taiwan-based giant’s annual report for last year.

Formosa Ha Tinh’s 2022 revenue dropped 15.7% year-on-year to TWD124.5 billion ($4.02 billion). In 2021, the steelmaker recorded a profit of TWD33.47 billion ($1.08 billion).

Formosa Ha Tinh attributed the underperformance to its development of new steel types for export to Europe and South America, while the U.S. Federal Reserve's (Fed) interest rate hikes dampened investment and consumption in general and global steel sales in particular. In response, Formosa Ha Tinh had to reduce its production partially.

Another subsidiary of the Taiwanese giant in Vietnam, Formosa Industries Corporation, also suffered a loss of TWD2.2 billion ($71.02 million) in 2022, compared to a profit in 2021. The firm said its operation was affected by unfavorable factors such as lower prices of China’s competing textile products, higher energy costs, inflation, and weakened demand.

Regarding its global operations, Formosa Plastics Group recorded a sales revenue of $84.56 billion and a pre-tax income of $6.37 billion last year.

Formosa Plastics Group entered Vietnam in 2001 with a 300-hectare factory in southern Dong Nai province to produce fiber, thermal power, plastics, and dyes.

In 2008, the Taiwanese corporation expanded its business in Vietnam with an investment of $28.5 billion for a 3,300-hectare steel complex in the central province of Ha Tinh, including a steel mill, a thermal power plant, and a deep-water seaport.

The firm is known in Vietnam for a marine environmental incident in Ha Tinh in 2016. The corporation was responsible for mass deaths of marine creatures along the coast of the central provinces of Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue. An estimated 70 tons of dead fish washed ashore along more than 200 km (125 miles) of Vietnam’s central coastline, hurting the livelihoods of millions dependent on the fisheries and tourism industries. It faced a penalty of $500 million which was fully paid in 2022.