Hoa Phat Group, one of Vietnam's largest and most prominent steel manufacturers, is making significant strides in preparing to produce high-quality steel for the country’s ambitious high-speed rail projects. The company recently confirmed that it is in the process of completing all necessary steps, including land clearance, to establish a steel production complex in Hoa Tam Industrial Zone, located in the Nam Phu Yen Economic Zone in Phu Yen province. This complex will be a critical part of the group’s strategy to supply Vietnam with specialized steel, including rail steel, for its proposed high-speed rail infrastructure.
According to Hoa Phat Group, the steel production complex will focus on producing various types of steel for industries like mechanical engineering, construction, and automotive, with rail steel as one of the most important products. Rail steel is a critical component for the development of high-speed rail systems, as it needs to meet very stringent standards for strength, durability, and performance under high-speed conditions. The complex will also produce other important steel products, such as plate steel, structural steel, shape steel, and special bar quality steel, which are all essential for the construction of modern infrastructure projects.
In preparation for this ambitious project, Hoa Phat has taken significant steps to ensure it meets global standards for rail steel production. The company's leadership, including President Tran Dinh Long, visited several major rail steel mills in Europe during October and November 2024 to learn from best practices in rail steel manufacturing. During these visits, Hoa Phat’s team gathered valuable insights into the latest technologies used in steel production, such as vacuum refining of metals for purity, online quality control systems, and ultrasonic testing to detect internal defects in rail steel. These advanced techniques are critical for producing high-quality rail steel capable of meeting the demands of high-speed rail projects.
Hoa Phat has also engaged in discussions with global leaders in rail steel manufacturing and equipment production. The company aims to transfer cutting-edge technologies and collaborate with these international experts to further enhance its steel production capabilities. This partnership will ensure that Hoa Phat can produce rail steel that meets international quality standards, which is vital for the success of Vietnam's high-speed rail network. Additionally, Hoa Phat's cooperation with the Hanoi University of Science and Technology (HUST) will help train skilled professionals in the production of high-quality steel, with a particular focus on steel for automotive tires, electrical engineering, and rail systems.
In terms of specific commitments, Hoa Phat has pledged to supply a total of 6 million metric tons of various steel products for the North-South high-speed railway project, one of Vietnam's largest infrastructure undertakings. This includes not only rail steel but also high-strength prestressed steel that is required for other structural components of the railway. Hoa Phat has emphasized that its steel will meet the strict international quality standards necessary for the project, and the company is confident that its prices will remain highly competitive compared to foreign imports.
The Hoa Phat Group's commitment to providing steel for Vietnam’s high-speed railway project comes at a time when the company is enjoying strong financial performance. In the first nine months of 2024, Hoa Phat reported a revenue of approximately $4 billion and a substantial increase in profits, up by 51% compared to the same period last year. The company has benefitted from a combination of rising steel prices and increasing demand for steel, which has been crucial in driving its growth. With steel representing 85% of Hoa Phat's total profits, the group is well-positioned to meet the needs of the country’s infrastructure projects.
