Nam Kim Steel builds $178 mln factory in southern Vietnam

Ho Minh Quang, chairman of Nam Kim Group, says work is proceeding space on the VND4.5 trillion ($177.55 million) Phu My steel roofing factory in Ba Ria-Vung Tau province and it should become operational in Q4/2025 or Q1/2026.

He was speaking Friday at the AGM of Nam Kim Steel JSC, listed on the HCMC Stock Exchange (HoSE) as NKG.

Quang said he expected the steel roofing factory, located at the My Xuan B1 Industrial Park I in the southern coastal province of Ba Ria-Vung Tau, to reach 100% capacity by 2027. It would expand the company's capacity from 1 million to 1.6 million tons per year, he added.

The factory’s high-products will include galvanizing and color plating lines, creating higher added value and serve exports, Quang said.

137% rise in pretax profit

He also announced estimates of NKG’s Q1 business results, including revenues of VND5,300 billion ($209.2 million) and pre-tax profit of VND188 billion ($7.4 million).

In Q1/2023, NKG had recorded revenues of VND4,380 billion ($172.9 million) and a pre-tax loss of over VND49 billion ($1.9 million).

NKG expects revenues of VND21,000 billion ($82.9 million) in 2024, up about 13% year-on-year; and a pre-tax profit of VND420 billion ($16.6 million), up 137% year-on-year, the AGM heard.

Steel market in 2024 and 2025

Vu Hoang Vu, general director, said that in 2024, the steel market will continue to face significant challenges, both locally and internationally. Domestic demand will remain low due to the fact that the real estate market has not fully recovered and demand for house construction and repairs will remain low.

European and North American markets, which account for 70% of Nam Kim's exports, are still struggling owing to inflation and a high interest rate environment. A strong economic recovery and increased investment demand beginning in 2025 and 2026 will coincide with NKG’s new factory becoming operational.

Exchange rate influence

Quang said as the company is exporting primarily to Europe and North America, an increase in exchange rates would be beneficial. However, in the long run, Nam Kim will balance the proportion of exports and imports to avoid being unduly influenced by exchange rate fluctuations.

He also said that the firm concentrates on using native raw materials, with only approximately 20-25% imported from China and India.

Steel price

Domestic and international demand, particularly in China, is extremely weak. Steel prices are currently low and fluctuate based on demand. Steel prices are unlikely to rise considerably, Quang said.

Green steel

Vu said green steel was an inevitable trend. Enterprises must ensure that input materials and production processes match emissions requirements. Nam Kim also has to consider choosing technology to meet green requirements, he added.