Steel sector gets the jitters

16:55 | 05/05/2012
Big steel firms are standing firm against rising market dangers.


illustration photo

Around 1.1 million tonnes of steel were sold out in the first quarter of 2012, 12 per cent down against the same period in 2011 and Vietnam Steel Association (VSA) chairman Pham Chi Cuong assumed the steel sector’s 4 per cent growth target in 2012 could sink beneath the waves.

The sector is facing escalating input costs, particularly power costs as state power authority Electricity of Vietnam intends to upwardly revise power prices sold to the steel sector saying that in 2011 the power sector subsided VND2,547 billion ($122 million) to the steel sector.

A recent US Department of Commerce decision levying an 8.06 per cent anti-subsidy tariff on carbon steel pipes imported from Vietnam has escalated steel firms’ current woes.

While small firms struggle to survive, big steel makers like Pomina Joint Stock Company (POM), Hoa Sen Group (HSG) or Hoa Phat Group (HPG) are making the most of their advantages to scale-up their market shares.

VNSteel held a 25.8 per cent construction steel market share by the end of  2012’s first quarter, its joint venture got 20.9 per cent market share and outside businesses the remaining 53.3 per cent market share, of them POM seized 13.9 per cent and HPG 14.5 per cent.

In respect to flat steel, HSG held a 33 per cent market share.

In 2011, POM set to achieve VND14,400 billion ($685.7 million) revenue, surging 20 per cent on-year. Albeit its long term target is promoting exports to Laos, Cambodia and the United Arab Emirates, the firm wants to increase its share in local market through expanding footprints in northern market.

In 2011, POM’s market share in northern Vietnam tripled the previous year, reaching 5 per cent.

Similarly, in 2011 HSG’s galvanised steel market share picked up 3.5 per cent against 2010 to reach 37.2 per cent. In respect to steel pipe, the group’s market share hiked 2.4 per cent on-year hitting 10.3 per cent, putting HSG among top five firms in steel pipe production three years after entering the market.

This year, HSG aims to achieve VND10,000 billion ($476 million) revenue and VND240 billion ($11.4 million) post-tax profits.

HPG wants to be the leading steel maker in Vietnam with its market share growing from 13.3 per cent in late 2011 to 13.9 per cent in 2012’s first quarter.
 

By Vu Anh

vir.com.vn

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