Hoa Phat Group has officially commenced construction on a steel manufacturing facility [1] in Vietnam, set to produce high-grade railway rails for the first time in the country. The announcement came during the group’s annual general meeting (AGM) on April 17, where chairman Tran Dinh Long confirmed the project’s total investment of VND14 trillion ($556 million). The factory, situated in Dung Quat 2 Industrial Zone in the central province of Quang Ngai, is expected to bolster Vietnam’s infrastructure development plans and enhance logistical connectivity.
Long expressed confidence in the success of the facility, underscoring Hoa Phat’s commitment to supplying all steel products necessary for Vietnam’s infrastructure expansion. He highlighted the group’s active participation in upcoming railway projects, aligning its strategy with the country’s push for improved transport networks.
The new development follows Hoa Phat’s recent contract with Primetals Technologies for the installation of a high-quality steel casting and rolling line with an annual capacity of 500,000 tonnes. The rolling line is expected to commence operations by the third quarter of 2026, while the casting system is slated for launch by the fourth quarter of the same year. The fully integrated production system includes a large-section bloom casting module for railway rail production and a beam-blank module for structural steel components, a move that aims to enhance domestic construction and engineering capabilities.
Vietnam’s macroeconomic environment presents strong growth opportunities for domestic steel manufacturers, as the government ramps up public investment and infrastructure projects. The Ministry of Construction is currently proposing direct orders from local producers for strategic materials, a policy shift that could significantly benefit Hoa Phat’s operations. With global supply chains remaining volatile, the focus on self-reliance in critical materials is gaining traction. Despite investor concerns regarding international uncertainties and protectionist policies, Long assured stakeholders of the group’s long-term resilience, emphasizing diversification across more than 40 export markets, including Southeast Asia, Japan, South Korea, Canada, and the EU.
Ahead of the AGM, Hoa Phat announced a revision to its 2024 dividend distribution plan, opting for a 20% payout entirely in shares rather than a mix of cash and stock. Management cited the need for greater cash flow flexibility amid global economic fluctuations and potential reciprocal tax frameworks. For 2025, the group set ambitious financial targets, aiming for VND170 trillion ($6.75 billion) in revenue, a 21% increase compared to 2024, alongside a projected after-tax profit of VND15 trillion ($595 million), up 24.8% year-on-year. In the first quarter of 2025, Hoa Phat recorded VND37.9 trillion ($1.5 billion) in revenue and VND3.3 trillion ($131 million) in after-tax profit, marking increases of 22% and 16%, respectively.
With export activities contributing 31% of total revenue, Hoa Phat remains a key player in Vietnam’s steel industry, reinforcing its position in global trade while supporting national infrastructure advancements. This latest investment signals a strategic leap for Vietnam’s steel sector, as the country moves toward self-sufficiency in high-grade steel production, fostering greater industrial competitiveness on the global stage.
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[1] Hoa Phat Group breaks ground on high-grade steel and railway track plant https://vir.com.vn/hoa-phat-group-breaks-ground-on-high-grade-steel-and-railway-track-plant-126740.html