Vietnam is accelerating its investment in transportation infrastructure to bolster economic growth, logistics efficiency, and national connectivity. In line with this vision, domestic industries are being mobilized to support large-scale public projects. The construction of high-speed railways and metro systems across cities has created unprecedented demand for high-quality steel, particularly railway rails which, until now, have been largely imported.
Against this backdrop, Hoa Phat Group has unveiled a major industrial development aimed at transforming Vietnam’s manufacturing landscape. By producing strategic materials like high-grade rails locally, the group hopes to reduce import dependency, enhance project timelines, and strengthen Vietnam’s industrial self-sufficiency.
Who’s Involved?
At the Annual General Meeting on April 17, 2025, Hoa Phat Group’s chairman Tran Dinh Long announced the launch of a new steel factory in the Dung Quat 2 Industrial Zone, Quang Ngai province. With an investment of VND14 trillion ($556 million), the facility will manufacture types of steel never previously produced in Vietnam, with a prime focus on premium railway rails.
The project also involves the participation of global metallurgical leader Primetals Technologies, with whom Hoa Phat recently signed a contract for an advanced casting & rolling line. This collaboration marks a significant leap in technology transfer, automation, and output quality for Vietnam’s steel sector.
Ambitions Beyond Steel
Long articulated a bold vision during the AGM: Hoa Phat aims to supply every category of steel needed for Vietnam’s national infrastructure initiatives. This includes structural steel for highways, steel plates for shipbuilding, and most crucially, railway rails for the country’s expanding rail network. “We don’t want to follow global trends—we want to set them here in Vietnam,” Long asserted.
The company has already begun planning participation in all upcoming rail projects under the national master plan, positioning itself as a foundational partner in Vietnam’s new transport architecture. This includes both high-speed intercity corridors and intra-city metro lines.
Inside the Mega Facility
The new plant features a fully integrated high-quality casting & rolling line with an annual capacity of 500,000 metric tons. The casting system will be operational by Q4 2026, while rolling output will commence in Q3 2026. Its technological backbone includes a large-section bloom casting module designed for railway rail production and a beam-blank module capable of producing structural steel up to 800 mm wide.
The facility also prioritizes sustainability, with modern emission controls, energy-efficient furnaces, and closed-loop cooling systems—aligning with Vietnam’s green industrial goals and its commitment to reducing CO₂ emissions.
Government Support & Policy Winds
Vietnam’s Ministry of Construction has floated proposals for the government to place direct orders with local producers for key materials. If implemented, this policy would greatly benefit companies like Hoa Phat, which are aligned with national priorities. The ministry’s proposal also reflects the state’s interest in stabilizing supply chains and supporting domestic industry amid ongoing global trade disruptions.
Such policy tailwinds have significantly brightened the investment climate for steelmakers, who were previously constrained by cheap imports, volatile input prices, and regulatory bottlenecks.
Macroeconomic Optimism & Risks
While international investors remain cautious due to geopolitical risks and protectionist trade policies, Hoa Phat remains focused on the long-term horizon. “We have to be prepared, but we remain committed to long-term goals,” Long noted, acknowledging potential external shocks while underlining domestic strength and resilience.
The timing of this expansion coincides with favourable macroeconomic conditions, including low-interest infrastructure loans, robust domestic demand, and incentives for advanced manufacturing. Analysts believe Hoa Phat’s first-mover advantage in railway steel could redefine the group’s trajectory in Southeast Asia.
Strategic Technology Transfer with Primetals
The partnership with Austria-based Primetals Technologies is more than just a supply contract. It includes technical training, on-site integration of AI-driven rolling systems, and post-installation quality control. This will help Hoa Phat build local expertise in metallurgical processes previously dominated by foreign firms, and could also position Vietnam as a steel innovation hub in the region.
By mastering complex metallurgical processes such as beam-blank casting, Hoa Phat will be able to cater not just to domestic construction needs but also potentially export to ASEAN countries.
Key Takeaways:
• Hoa Phat Group is building a $556 million high-grade steel plant in Quang Ngai, Vietnam.
• The plant will focus on railway rail production—a first in Vietnam.
• Production capacity of the new casting & rolling line is 500,000 metric tons annually.
• Global firm Primetals Technologies is providing advanced casting equipment.
• Government policy may soon allow direct orders from local producers for strategic projects.
• Chairman Tran Dinh Long affirmed Hoa Phat’s aim to support all future railway projects.
