This year, Vietnam’s leading steel producer Hoa Phat plans to put its Dung Quat 2 “mega-project” in Quang Nam into operation. The project is expected to boost the Group’s capacity in several industries that require high-quality steel, such automotive, as the Vietnamese automobile industry continues to flourish with domestic and foreign manufacturers.
The Dung Quat 2 Project was 50% complete as of the end of March. The Dung Quat 2 Project has a total investment of up to 85,000 billion VND and is designed with a capacity of up to 5.6 million tons of steel per year; of which, special steel accounts for about 1 million tons, and the remainder is hot-rolled coil (HRC).,
According to Ms. Phan Thi Kim Oanh, Hoa Phat’s CFO, the project is expected to come online in the last quarter of this year. Previously, Hoa Phat had announced that the Dung Quat 2 Project would be operational from the beginning of 2025. As such, it is likely that the Dung Quat 2 Project will be “completed” ahead of schedule.
Perspective of Hoa Phat’s Dung Quat 2 Project in Quang Nam.
Previously, Hoa Phat’s Chairman of the Board, Mr. Tran Dinh Long, stated that Dung Quat 2 was one of the Group’s most important projects. In Industry and Trade Magazine, he said: “This project is equivalent to 1,000 medium and small projects, equivalent to 100 other large projects that Hoa Phat has undertaken on its own without the support of any foreign corporation whatsoever”.
The Dung Quat 2 plant will specialize in the production of hot-rolled coil HRC. Previous information indicated that in Phase 1, Dung Quat 2 will be able to produce 1.5 million tons of steel per year; while to reach its maximum capacity of 5.6 million tons/year, the plant will need approximately 3 years.
With Dung Quat 2, Hoa Phat’s total capacity will surpass 14 million tons of crude steel per year, helping the Group maintain its position as the largest steel producer in Southeast Asia and among the top 30 largest steel producers in the world as of 2025.
Hot-rolled coil HRC will increase Hoa Phat’s involvement in the automotive industry. Photo: Hoa Phat.
Dung Quat 2 will enable Hoa Phat to participate more deeply in industries that use high-quality steel, such as shipbuilding and automobiles.
Referring specifically to the automotive industry, Hoa Phat has previously stated that the Group is now capable of producing steel for automotive tire beads. In 2022, Hoa Phat successfully produced automotive tire bead steel under two steel grades: SWRH82A and SWRH72A.
Meanwhile, hot-rolled coil HRC can be used to manufacture automotive bodies. An article in Nikkei Asia also reported that Hoa Phat aims to supply finished steel to the automotive industry while also striving to increase both its output and product quality.
The Director of Hoa Phat Dung Quat Steel Joint Stock Company, Mr. Mai Van Ha, added that Hoa Phat will increase investment in developing high-quality products for applications in the automotive industry.
The Dung Quat 2 Project can produce 4.6 million tons of HRC steel per year. Photo: Hoa Phat.
Hoa Phat’s Dung Quat 2 Project is being built amidst encouraging news for the automotive industry in Vietnam. Most recently, the JAECOO&OMODA brand of Chery (China) signed a contract with a Vietnamese partner to jointly build an automobile factory in Thai Binh.
Meanwhile, BYD, the world’s largest electric vehicle manufacturer, is also rumored to be building a car factory in Phu Tho, where the company has a tablet manufacturing facility. BYD’s automobile factory, once operational, is likely to be located within the Phu Ha industrial zone on a 100-hectare plot owned by the Gelex Group (Vietnam).
The Vietnamese automotive industry is welcoming many new manufacturers. Photo: Inside the VinFast automobile factory.
In Vietnam, VinFast has built an automobile factory in Hai Phong with a total area of 335 hectares. The factory was officially inaugurated on June 14, 2019, after more than 2 years of construction. The factory has produced a range of products including electric bicycles (not yet officially delivered), electric motorbikes, gasoline-powered and electric automobiles, and electric buses.
In addition to VinFast, automobiles from many foreign brands are also being assembled in Vietnam, including BMW, Mercedes, and Skoda.
Meanwhile, Toyota’s automobile factory in Vinh Phuc uses more than 1,000 domestically produced components from 13 suppliers. The localization rate of Toyota vehicles assembled in Vietnam reaches approximately 40%, with the Vios model achieving 43%.
