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Management agencies nSteel sector aims for high growth this yeareed efective solutions to limit Chinese steel imports and eliminate technical barriers that unnecessarily add to the challenges facing domestic steel businesses.

The Vietnam Steel Association (VSA) says it is optimistic about the steel market’s outlook in 2013 and confident that the 3 percent growth target is attainable thanks to government credit policies.

Steel output for construction dropped to 4.5 million tonnes, down 10 percent, but the consumption of other steel products rose by 20–40 percent. Last year’s overall steel consumption showed a 3 percent increase on the previous year.

VSA Chairman Pham Chi Cuong said steel ingot businesses have been hardest hit by the economic downturn. As steel output fell by 13–14 percent. Many factories were forced to narrow the scope of production and some businesses even declared bankruptcy.

According to the Economic Times’ statistics, as much as 30-40 percent of steel businesses suffered losses last year. VSA Vice President Le Minh Hai explains that the sector had initially attracted significant investment in steel production. But many businesses failed to achieve market penetration in the face of low cost steel imported from China.

Only some still managed to make a profit. Viet Duc Steel Joint Stock Company earned nearly VND6,000 billion in revenue with a profit of roughly VND10 billion. Hai hopes that in 2013 will be able to corner the market with its products at competitive but reasonable prices to raise its profit by 15-20 percent over last year.

Hoa Phat Group Joint Stock Company also made a VND1,100 billion profit in 2012. The company not only offered competitive prices, but also increased the production and export of the sector’s three key commodities.

Hoa Sen Group which earned VND350 billion in profit in 2012, plans to achieve 10 percent increases in revenue and profit this year. Cuong says the company’s distribution network is relatively efficient and goods consumption and capital turnover keeps growing at a steady pace.

The steel sector’s 3 percent growth target is not beyond reach if the macro economy remains stable as expected, Cuong argues.

However, Hai warns 2013 will still be difficult for construction material businesses but not quite as challenging as 2011 and 2012. The Government’s credit policies may ease pressure for construction materials to revive the real estate sector.

Source: VOV

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