New southern Vietnam plant to bring 'sustainable, long-term benefits' to Nam Kim Steel: chairman

Vietnamese steel major Nam Kim's 1 million-ton Phu My plant in the southern province of Ba Ria-Vung Tau is expected to create sustainable and long-term benefits for the company, said CEO Vo Hoang Vu.

The VND4.5 trillion ($172.93 million) plant will feature technologies different from those at other facilities in the industry and develop products that Nam Kim has not manufactured, Vu told the company's 2025 AGM in Ho Chi Minh City on Friday.

These products will be used to supply raw materials for industrial production, industrial accessories, automotive components, and other high value-added products.

The plant is progressing on schedule and expected to begin operations in Q1/2026, primarily serving the domestic market. It will require 2-3 quarters for ramp-up, with expectations of reaching 50-60% capacity by Q4/2026 and full capacity by 2027.

Ceasing exports to U.S.

According to chairman of the board of directors Ho Minh Quang, Nam Kim's export volume to the U.S. in 2024 was relatively low, accounting for only about 10% of the total.

The U.S. anti-dumping investigation that began in September 2024 has significantly reduced its exports. At present, the company has ceased exporting to this market

"I anticipate that exporting to the U.S. will continue to face challenges in the near future. Nam Kim will focus on diversifying its product portfolio to include items with fewer trade barriers, enabling exports to a broader range of markets," Quang said.

CEO Vu added that in the U.S., Nam Kim has not made any sales since Q4/2024. Therefore, the impact of the U.S. reciprocal tariff is limited. Shifting 5% or 10% of exports to other markets is more manageable than relying entirely on the U.S.

No share buyback plan

NKG shares on the Ho Chi Minh Stock Exchange have recently declined sharply to around VND12,000 ($0.46) per share. Many shareholders have expressed a desire for the company to buy back its shares to support the price.

However, the CEO explained that Nam Kim had just completed a share issuance to raise capital for its new plant. A buyback at this time would reduce the charter capital, contradicting the recent capital increase.

Vu assured shareholders that the new plant focuses on high-margin products and is expected to generate strong returns. “There’s no reason to buy back shares while we still need capital,” he said.

Chairman Quang added: “I am confident that with the direction taken by the board of directors and the management board, we will see positive results in the future. I firmly believe that long-term investors in Nam Kim will eventually harvest sweet fruit. That is our commitment.

“Once the Phu My plant becomes operational, it will provide sustainable and long-term benefits to the company. We hope everyone will stay the course and patiently get through this phase with us.”

Quang further explained that Vietnam is able to export due to competitive and reasonable pricing. "Moreover, if Nam Kim introduces new products unrelated to galvanized steel - those outside the scope of anti-dumping measures - they can still be exported. He forecast that conditions should stabilize in the next 3 to 6 months."

In 2025, the board of directors plans to issue up to 4.5 million Employee Stock Ownership Plan (ESOP) shares at a price of VND10,000 ($0.38) per share.

This year, Nam Kim aims to sell 1.05 million tons of steel, slightly up from 1.02 million tons in 2024. It targets revenue of VND23 trillion ($883.88 million), up 11% year-on-year, and pre-tax profit of VND440 billion ($16.9 million), down 21%.

In 2024, the firm recorded revenue of VND20.7 trillion ($795.5 million), an increase of 11% from the previous year. Its pre-tax profit tripled to VND558 billion, exceeding the target by 133%, and after-tax figure reached VND453 billion ($17.41 million), up nearly 286% year-on-year.

Despite the positive results, the leadership decided not to pay dividends for 2024. Instead, the company will allocate capital to reserve funds (2%), development investment (3%), and employee bonus and welfare programs (5%).

Nam Kim's NKG shares closed Friday at VND11,950 ($0.45) per share.