Vietnamese Steel Leader Expands High-Quality ProductionCapabilities
Hoa Phat Group, Vietnam's leading industrial manufacturinggroup and Southeast Asia's largest steel producer, has taken a significant steptoward strengthening its position in the high-quality steel market. On April10, 2025, the company signed a contract with Primetals Technologies for thesupply and implementation of advanced steel manufacturing technology that willsubstantially enhance its production capabilities.
The investment includes a long product caster with anannual capacity of 1 million tons and a rolling line capable of producing500,000 tons per year. This strategic expansion will enable Hoa Phat tomanufacture premium steel products that are currently being imported intoVietnam, supporting both domestic infrastructure development and exportopportunities.
The new facilities are scheduled to begin operations in2026, with the rolling line expected to start in the third quarter and thecasting line in the fourth quarter. This timeline reflects the complexity andscale of the implementation, which involves cutting-edge technologies designedto meet the most stringent quality standards in the global steel industry.
Advanced Casting Technology for Superior Steel Quality
Multi-Format Casting Capabilities
The contract includes the design, supply, and installationof a versatile billet/bloom/beam blank casting machine. This flexibility allowsHoa Phat to produce multiple steel formats to serve diverse market needs:
- Billets: Smaller square or rectangular semi-finishedsteel products typically used for wire rod, rebar, and merchant bar production
- Blooms: Larger semi-finished steel products used forstructural sections and rails
- Beam blanks: Near-net-shape castings specificallydesigned for efficient production of structural beams
The caster's standby solution for large-section-sizecasting enables the production of blooms and beam blanks for steel profiles upto 800 millimeters wide, making it particularly suitable for structural steelapplications in construction and infrastructure projects.
DynaGap Soft Reduction Technology
At the heart of the casting system is PrimetalsTechnologies' DynaGap Soft Reduction technology, which addresses one of themost persistent challenges in steel casting: centerline segregation. Thisdefect occurs when alloying elements concentrate in the final solidifyingportion of the steel strand, creating inconsistencies in the material'sproperties.
The DynaGap system applies precisely controlled mechanicalreduction to the strand while the core is still partially liquid, effectivelyminimizing segregation and improving the homogeneity of the steel's internalstructure. This results in superior mechanical properties and performance inthe final products, particularly critical for high-demand applications likeautomotive components and railway infrastructure.
Comprehensive Automation and Process Control
The casting system will be equipped with an advanced Level1 and 2 automation system that provides precise control over the entire castingprocess. This system incorporates several sophisticated technologies:
- DynaPhase: A thermodynamic phase transformation modelthat calculates steel behavior during solidification based on thermal enthalpy,conductivity, and density
- Dynacs 3D: A secondary-cooling model that uses data fromDynaPhase to calculate the full three-dimensional temperature profile at anyposition along the strand
- DynaGap Soft Reduction 3D: A dynamic roll-gap controlsystem that applies the optimal reduction to minimize centerline segregationbased on real-time calculations from the other systems
This integrated approach to process control enables HoaPhat to achieve consistent quality across different steel grades and castingformats, a critical capability for serving premium market segments.
## State-of-the-Art Rolling Technology for PrecisionProducts
### Advanced Rolling Mill Configuration
The contract also includes a comprehensive wire rod rollingline featuring multiple advanced components:
- 18 No-Housing Stands and Mill Shears: Providing theinitial reduction and shaping of the steel
- 10-Stand eDrive No-Twist Mill (NTM): The latestgeneration of Primetals Technologies' renowned NTM technology, featuringindividually driven stands that allow infinite processing flexibility per stand
- Morgan Rod Reducing/Sizing Mill (RSM): Ensures precisedimensional control and tolerance management, particularly important forhigh-carbon applications like tire cord
The eDrive NTM represents a significant technologicaladvancement over conventional rolling mills. Traditional mills typically use asingle motor to drive multiple stands through a gearbox arrangement. Incontrast, the eDrive system employs individual motors for each stand, allowingfor precise speed control and optimization of each reduction step. Thisflexibility enables Hoa Phat to achieve superior dimensional accuracy andsurface quality across a wide range of product specifications.
Integrated Heat Treatment and Cooling
The rolling line incorporates sophisticated thermalprocessing capabilities that are essential for achieving the desiredmetallurgical properties in high-quality steel products:
- Metallurgical In-Line Heat Treatment: Enables precisecontrol of the steel's microstructure
- Morgan Water Boxes: Provide controlled cooling atspecific stages of the rolling process
- Morgan Stelmor Controlled Cooling Conveyor: Allows forprecisely managed cooling rates to achieve optimal mechanical properties
These thermal management systems give Hoa Phat the abilityto fine-tune the microstructure and mechanical properties of its products,reducing the need for alloying elements while still meeting stringentperformance requirements. This approach can lead to significant cost savingswhile maintaining or even improving product quality.
Long Rolling Process Expert Automation
Complementing the physical equipment is PrimetalsTechnologies' Long Rolling Process Expert automation solution, which enhancesinterconnectivity and plant management. This system features an intuitiveinterface that allows operators to:
- Monitor real-time plant performance
- Track quality parameters
- Optimize production processes
- Manage maintenance schedules
- Analyze historical data for continuous improvement
The automation system serves as the brain of the operation,collecting and processing data from throughout the production line to supportinformed decision-making and ensure consistent quality.
Strategic Significance for Hoa Phat and Vietnam'sIndustrial Development
Import Substitution and Export Opportunities
Hoa Phat's Chairman of the Board of Directors, Tran DinhLong, emphasized the strategic importance of the investment: "Hoa PhatGroup is prioritizing the domestic production of high-quality steel andmanufactured steel, which are currently being imported. The new equipment fromPrimetals Technologies will support our production of steel for the railwayindustry, i.e. train axles and high-speed trains, as well as high-quality steelfor key national projects and for export to the world market."
This statement highlights two key strategic objectives:
1. Import Substitution: Reducing Vietnam's dependence onimported high-quality steel by developing domestic production capabilities
2. Export Development: Establishing Hoa Phat as acompetitive supplier of premium steel products to international markets
Both objectives align with Vietnam's broader industrialpolicy goals of moving up the value chain and reducing trade deficits inadvanced manufacturing sectors.
Expanding Product Portfolio
The new production line will enable Hoa Phat to manufacturea diverse range of high-quality steel products, including:
- Automotive Steel: Tire bead, tire cord, and bead wire forthe growing automotive industry
- Bearing Steel: Precision components for industrialmachinery and automotive applications
- Prestressed Steel: High-strength materials for concretereinforcement in infrastructure projects
- Railway Steel: Specialized products for train axles andhigh-speed rail systems
This expanded product portfolio positions Hoa Phat to servegrowing demand in Vietnam's developing industrial sectors while also capturingopportunities in regional and global markets.
Regional Leadership in Steel Manufacturing
Satoru Iijima, Director of the Board and Fellow Advisor atPrimetals Technologies, highlighted the significance of the project for HoaPhat's competitive positioning: "When this new line is put into operation,the Hoa Phat Group will be able to produce a wide range of high-qualityproducts, making them a leader in the region meeting the most stringentproduction standards."
This assessment reflects the transformative potential ofthe investment, which could elevate Hoa Phat from a primarily volume-orientedproducer to a provider of sophisticated, high-value steel products that meetinternational quality standards.
Technical and Operational Advantages
Quality Improvements Through Advanced Technology
The combination of DynaGap Soft Reduction in casting andthe eDrive NTM in rolling represents a comprehensive approach to qualityimprovement that addresses both internal and external characteristics of thesteel:
- Internal Quality: The DynaGap technology minimizescenterline segregation and porosity, resulting in more homogeneous mechanicalproperties throughout the steel
- Dimensional Accuracy: The individually driven stands inthe eDrive NTM enable precise control of reduction at each stage, ensuringtight dimensional tolerances
- Surface Quality: Advanced control systems throughout theprocess minimize surface defects that could compromise product performance
These quality improvements are particularly important fordemanding applications like automotive safety components, railwayinfrastructure, and high-rise construction, where material failures could haveserious consequences.
Cost Optimization Through Process Efficiency
Beyond quality improvements, the new technology offersseveral avenues for cost optimization:
- Reduced Alloying: Superior process control allows forachieving the desired mechanical properties with lower amounts of expensivealloying elements
- Energy Efficiency: The eDrive system optimizes energyconsumption by precisely matching motor output to process requirements
- Yield Improvement: Advanced automation reduces materiallosses throughout the production process
- Maintenance Optimization: Predictive maintenancecapabilities in the automation system minimize unplanned downtime
These efficiency gains can help offset the substantialcapital investment required for the new equipment, improving Hoa Phat'scompetitive position in both domestic and international markets.
Flexibility for Market Responsiveness
The versatility of the new production line gives Hoa Phatenhanced ability to respond to changing market conditions and customerrequirements:
- Multiple Product Formats: The ability to cast billets,blooms, and beam blanks allows for serving diverse market segments
- Grade Flexibility: Advanced process control enablesefficient production of different steel grades with minimal transition time
- Dimensional Range: The rolling mill can produce a widerange of dimensions to meet varied customer specifications
This flexibility is particularly valuable in the currentglobal steel market, which is characterized by volatility in both demandpatterns and raw material costs.
Implementation Timeline and Project Management
The announced timeline indicates that the rolling line willcommence operations in the third quarter of 2026, followed by the casting linein the fourth quarter. This sequencing is logical from a project managementperspective, as it allows for:
1. Installation and commissioning of the rolling equipment
2. Testing and optimization of the rolling process usingpurchased billets
3. Integration of the casting line once the downstreamprocesses are stabilized
This phased approach minimizes operational disruption andallows for a more controlled ramp-up of the new capabilities.
Satoru Iijima of Primetals Technologies emphasized thecompany's commitment to "providing the highest quality equipment whileensuring safe and timely commissioning," highlighting the importance ofeffective project execution in realizing the full potential of the investment.
Broader Industry Context and Market Implications
Vietnam's Evolving Steel Industry
Hoa Phat's investment comes at a significant moment in thedevelopment of Vietnam's steel industry. As the country continues its rapidindustrialization and urbanization, demand for high-quality steel is growingacross multiple sectors:
- Infrastructure Development: Major projects intransportation, energy, and urban development
- Manufacturing Growth: Expansion of automotive,electronics, and machinery production
- Construction Boom: Ongoing development of residential,commercial, and industrial buildings
Historically, much of the high-quality steel required forthese applications has been imported, creating a trade deficit in thisstrategic sector. Hoa Phat's investment represents a significant step towardgreater self-sufficiency in advanced steel products.
Regional Competitive Dynamics
As Southeast Asia's largest steel producer, Hoa Phat's moveinto higher-value products has implications for regional competitive dynamics:
- Import Competition: The new capacity will competedirectly with imports from Japan, South Korea, and China
- Export Opportunities: Enhanced capabilities could opennew export markets for Vietnamese steel
- Technology Leadership: The investment signals Hoa Phat'sambition to close the technology gap with more established regional producers
The partnership with Primetals Technologies, a globalleader in metallurgical plant solutions, provides Hoa Phat with access totechnology that is comparable to that used by the world's most advanced steelproducers.
Sustainability Considerations
While not explicitly highlighted in the announcement,modern steel production technology typically offers sustainability advantagesthat are increasingly important in global markets:
- Energy Efficiency: Advanced process control minimizesenergy consumption per ton of product
- Material Efficiency: Higher yield rates reduce wastegeneration
- Quality Improvement: More durable steel productscontribute to longer service life in end applications
These sustainability benefits could enhance Hoa Phat'scompetitiveness in markets where environmental performance is becoming a keypurchasing criterion.
Conclusion: A Transformative Investment for Hoa Phat andVietnam's Steel Industry
Hoa Phat's contract with Primetals Technologies representsa significant milestone in the company's evolution and in the development ofVietnam's steel industry. By investing in advanced casting and rollingtechnology, Hoa Phat is positioning itself to move up the value chain fromcommodity steel products to high-quality, specialized materials that commandpremium prices and serve critical applications.
The 1 million ton casting capacity and 500,000 ton rollingcapacity will substantially enhance Hoa Phat's production capabilities,enabling import substitution for products that Vietnam currently sources fromabroad while also creating new export opportunities. The focus on high-qualityproducts for demanding applications like automotive tire cord, railwaycomponents, and prestressed concrete reinforcement aligns with Vietnam'sbroader industrial development goals.
From a technological perspective, the investment bringsworld-class manufacturing capabilities to Vietnam, with features like DynaGapSoft Reduction, eDrive No-Twist Mill technology, and advanced automationsystems that enable precise control over product quality. These capabilitieswill allow Hoa Phat to meet the most stringent international standards andcompete effectively in premium market segments.
As the project moves toward its targeted completion in late2026, it will be watched closely by industry observers as an indicator ofVietnam's industrial maturation and Hoa Phat's evolution into a moresophisticated, technology-driven steel producer capable of competing on qualityrather than just price in the global marketplace.
Key Takeaways:
* Hoa Phat Group signed a contract with PrimetalsTechnologies on April 10, 2025, for advanced steel manufacturing equipment
* The investment includes a long product caster with 1million tons annual capacity and a rolling line with 500,000 tons capacity
* The rolling line is scheduled to begin operations in Q32026, followed by the casting line in Q4 2026
* The casting machine features DynaGap Soft Reductiontechnology for superior internal strand quality
* The caster can produce billets, blooms, and beam blanks,with capability for profiles up to 800mm wide
* Advanced automation includes DynaPhase thermodynamicmodeling and Dynacs 3D temperature profiling
* The rolling line features 18 no-housing stands, a10-stand eDrive No-Twist Mill with individually driven stands
* The Morgan Rod Reducing/Sizing Mill ensures precisiontolerances for high-carbon applications like tire cord
* Integrated heat treatment includes Morgan Water Boxes anda Stelmor Controlled Cooling Conveyor
* The Long Rolling Process Expert automation systemenhances plant management and process optimization
* The investment will enable Hoa Phat to produce steel forautomotive tire components, railway applications, bearing steel, andprestressed steel
* The project supports Hoa Phat's strategy to substituteimported high-quality steel with domestic production
* Hoa Phat is Vietnam's leading industrial manufacturinggroup and Southeast Asia's largest steel producer
* The technology will help reduce alloying and energy costswhile maintaining premium product quality
