Viet Steel Corp will start work this March on a second steel furnace in Phu My 1 Industrial Park in the southern province of Ba Ria- Vung Tau with an annual output of one million tonnes of steel ingot, the company’s CEO said.

General director Do Duy Thai told the Daily late last week that his company would spend US$200 million on the new furnace, which will help increase the company’s output to 1.5 million tonnes of steel ingot a year. Thep Viet has operated since 2007 a furnace in the same industrial park with an output of 500,000 tonnes, which was developed at a cost of US$150 million.

The new factory will be up and running after 24 months of construction, Thai said.

Thai also said that the company’s Phu My steel laminating factory will start production in April this year, with a capacity of 500,000 tonnes of steel products per year, raising Thep Viet’s total capacity of steel products to 1.1 million tonnes a year.

Thai, who is also a vice chair of Vietnam Steel Association, admitted that local steel makers were facing huge difficulties due to falling prices and low demand, although prices have increased slightly recently.

“Many steel producers in the country, especially some ingot producers of the association, have stopped their production activity for a long while due to financial reasons and low consumption on the world market,” he stressed.

Therefore, Thai criticised the Ministry of Industry and Trade’s proposal for increasing power prices because it could lead to more difficult conditions for the steel industry.

According to the association, most of steel producers in the country have reduced their production down to 60% of capacity due to the impacts of economic slowdown. Even worse, nearly one-third of the steel industry’s workforce have either become jobless or underemployed, Thai said. (SGT)