Hoa Phat Group, Vietnam’s top steel maker, will embark on constructing its Dung Quat 2 iron and steel project in Quang Ngai province this month, the company said in a release.
The factory is located on 280 hectares next to the group’s Dung Quat 1 complex in Dung Quat Economic Zone. Operational in the next three years, it will produce 5.6 million tons of hot-rolled coil (HRC) per year and create 8,000 jobs.
With Dung Quat 2, Hoa Phat’s steel production capacity will jump to 14 million tons per year, placing the Vietnamese group among the world’s top 30 steel makers by 2025, it said.
Hoa Phat Dung Quat Steel JSC, a subsidiary of Hoa Phat Group, on Wednesday signed a credit contract with eight major Vietnamese banks, under which it will receive VND35 trillion ($1.53 billion) in loans. The funding, with Vietcombank acting as the chief arranger, raises the project’s total investment to VND85 trillion ($3.7 billion).
This is the largest ever bank loan of Hoa Phat Group, with a term of seven years and a grace period of two years.
Hoa Phat has invested in six projects in Dung Quat Economic Zone, with a total registered capital of over VND149 trillion (nearly $6.52 billion).
The $2.62 billion Dung Quat 1 iron & steel complex spans 340 hectares, produces 4 million tons of products per year and employs 13,600 people. Its second phase has been tested since the first quarter of 2021.
Capitalised at more than $165 million, the Hoa Phat Dung Quat container port is expected to operate all three terminals 6, 7, and 8 by the end of 2023.
Other projects include the $11.6 million raw water supply project for Dung Quat complexes, the $5.2 million Hoa Phat Dung Quat ancillary equipment factory and the $5.2 million Harmonia hotel. The first two are completing procedures for phase 2 implementaton.
Hoa Phat has proposed several new large-scale projects for the coming years in Dung Quat such as the 312 ha Dung Quat 3 iron & steel complex, with an annual capacity of 5.6 million tons, a 330 ha iron alloy project, a 800 ha industrial park, a 113.5 ha port and logistics area serving Dung Quat 3, and satellite projects.
In the first two months of the year, Hoa Phat’s construction steel sales reached 828,000 tonnes, a 2.2-fold increase year-on-year. Of this, 174,000 tonnes was shipped overseas, 2.6 times higher than the same period last year. Major export markets are Singapore, Hong Kong, Canada, Japan, South Korea and Cambodia. The group’s complete construction steel products are expected to grow over 20 percent this year against 2021.
A plant invested by Hoa Phat Group to manufacture containers in Ba Ria-Vung Tau province will test run in the third quarter and launch products from the fourth quarter.