Master plan for steel industry needs overhaul: association

The Ministry of Industry and Trade is making overall revision of the master plan for the country’s steel industry for 2011 – 2020 as the designed capacity of current steel mills has far outpaced demands, an industry insider said.

Nguyen Tien Nghi, vice chair of the Vietnam Steel Association (VSA), told the Daily that the master plan approved by the government in September 2007 must now be redone to avoid overproduction which might lead to undercutting among steel makers.

“To avoid overproduction for the domestic steel industry, VSA has petitioned the government to do a lot of adjustments, and has provided practical facts and figures for the industry ministry to correct the national master plan,” Nghi said.

He explained that the current master plan, whose goal is to realise local production of some 20 million tonnes by 2025, has now been far transcended since the current designed capacity of licensed steel projects has shot up to almost 40 million tonnes.

He said the ministry would organise seminars to carefully take in suggestions from local experts for adjusting the national master plan, adding the new plan should be completed by September this year.

Last month, VSA also proposed the government to ask relevant ministries to check the progress of steelmaking projects nationwide and revoke licenses of those foot-dragging projects, saying stagnant projects could lead to wastefulness and obstruct the investment opportunities of other competent investors.

Furthermore, excessive capacity would lead to fierce competition among local producers.

Latest statistics from the association showed that total capacity of the country’s current steel mills amounts to some 20 million tonnes, including 5.3 million tonnes of ingots, some 7.8 million tonnes of construction steel, about 1.3 million tonnes of steel pipes, some 1.2 million tonnes of metal-plated steel and about 2.5 million tonnes for of cold-rolled steel.

Last week, the Ministry of Industry and Trade asked all provinces and cities nationwide to reassess all licensed steel projects for data needed for the revision of the master plan for the steel industry.

Figures from the ministry show that as of last August, there were 65 approved projects of steel and cast iron production in the country.

However, only 17 projects out of this number were listed in the national master plan, while 16 others had received agreement from the ministry, and 32 other steel projects had been licensed by the provincial or municipal government but without final approval of the central government or the ministry’s agreement.

Nghi of VSA said that the biggest headache for country’s the steel industry is the slow progress of licensed projects, and suggested that the ministry probe the financial competence of investors before making the revised master plan.

“In the coming time, I think the investors must pledge a specific point of time for executing their licensed projects with the authorities,” said the vice chair of the association.

He cited several billion-dollar steel projects that have been stagnant for years due to lack of investment capital.

Tags: Vietnam steel industry, Vietnam steel market