Minh Ngoc Steel: A 'quiet' major player in hydroelectric sector

Minh Ngoc Producing and Trading Co., Ltd. (Minh Ngoc Steel), founded by entrepreneur Dong Tuan Vu, has quietly made its mark on the hydroelectric sector, in addition to establishing itself as a key player in the steel industry.

Minh Ngoc Steel recently drew attention from investors after becoming a major shareholder in RedstarCera Joint Stock Company (UPCoM: TRT), acquiring a 33.46% stake following the divestment of Vietnam Steel Corporation (VNSteel - UPCoM: TVN).

Founded in 2005, Minh Ngoc Steel manufactures and distributes a range of steel products, including galvanized steel pipes; square, round, and rectangular pipes; as well as hot-dip galvanized pipes for use in industrial and civil construction projects, handicrafts, interior and exterior decoration, electromechanical manufacturing, precision engineering, and stamped products.

The company operates a closed production process, with four continuous galvanizing lines and over 20 pipe rolling lines, boasting an annual production capacity exceeding 300,000 tons.

After nearly two decades in operation, Minh Ngoc Steel has become a significant name in the steel industry, particularly in the northern and central regions, and at one point, it commanded a leading market share in Laos.

The rise of Minh Ngoc Steel is closely linked to the leadership of Dong Tuan Vu. The entrepreneur began his career in the steel industry at VNSteel. In 1999, while still employed at VNSteel, he founded Quang Minh Company, with its first product being uncoated black steel pipes.

In 2005, Vu, along with his partners, founded Minh Ngoc Steel. As of September 2023, the company had recorded a charter capital of VND1.7 trillion ($67 million), with Vu holding a 51.59% stake, while the remainder is owned by his wife, Pham Thuy Nga. The CEO and legal representative of the company is Do To Hieu, born in 1978.

However, few people know that Dong Tuan Vu is also passionate about the hydroelectric industry.

A discreet name in hydropower

Minh Ngoc Steel is the second-largest shareholder, holding a 48.67% stake in Bac Na Electricity Joint Stock Company (EBA), the investor behind the Bac Na 1 and Bac Na 2 hydropower projects in Lao Cai province.

The largest shareholder is Song Da 505 Joint Stock Company, with a 51.2% stake. The total installed capacity of the projects is 20 MW, with an average annual output of 80 million KWh.

In Q1/2021, Minh Ngoc Steel acquired 10.22 million shares of Nam Chien Electric Development JSC from Northwest Electric Investment and Development JSC (NED) at VND17,711 ($0.7) per share.

According to its website, Minh Ngoc Steel owns the Nam Chien 2 and 3 hydroelectric plants, which have a combined capacity of 35 MW and generate an average annual electricity output of approximately 145 million KWh. These plants are located in Ngoc Chien, Chieng Muon, and Chieng San communes in Muong La district, Son La province.

Minh Ngoc Steel is also a founding shareholder, holding 30% of the shares in Ngan Truoi Hydroelectric JSC, alongside two other shareholders: Agrimeco (51%) and DakSrong JSC (19%), a subsidiary of Agrimeco.

Ngan Truoi Hydroelectric JSC is known for its investment in the Ngan Truoi hydropower project in Vu Quang district, Ha Tinh province.

The project broke ground in December 2017 with an investment of over VND340.3 billion ($13.4 million), an installed capacity of 13.5 MW, and an average annual output of 55.03 million KWh.

Notably, Vu was once a member of the board of directors and a major shareholder of Agrimeco, holding 24.55% of its shares. However, in mid-2023, he stepped down from the board and divested his entire stake in the company.

Despite his departure, the relationship between Minh Ngoc Steel and Agrimeco remains strong, as Le Tuan Anh, Vu’s son-in-law, currently serves as a board member and holds an 8.83% stake in Agrimeco.

Furthermore, Minh Ngoc Steel and Agrimeco have jointly invested in the Ban Mong Hydroelectric project, located in Yen Hop commune, Quy Hop district, Nghe An province.

As of June 30, 2024, Agrimeco had made an investment of VND134.4 billion ($5.3 million) in this project. In Nghe An province, Minh Ngoc Steel is also involved in the Chi Khe hydroelectric project, located in Chi Khe commune, Con Cuong district.

The project, which began in August 2013, commenced operations in 2019. The hydroelectric plant has a designed dam height of 38 meters and an installed capacity of 42 MW, and operates with a low-level water column from the Khe Bo hydropower plant.