## Vietnam’s Hoa Phat Group Signs Contract with Germany’s SMS group for Advanced Rail and Special Steel Production Technology
On May 29th, Hoa Phat Group, a leading Vietnamese steel producer, and SMS group, a top German technology provider, signed a contract for the supply of technology and production lines for rail and special steel. The contract is a crucial component of Hoa Phat’s upcoming steel mill in Dung Quat, Quang Ngai, with a total investment of VND 14,000 billion.
With a projected completion time of 20 months from the contract signing, the production lines will yield the first products by Q1 2027. The mill will manufacture specialized rail steel for high-speed railways, urban railways, and crane rails, as well as high-quality steel shapes (U, I, H, and V sections). Currently, Vietnam relies on imports from major producers such as Voestalpine (Austria), JFE (Japan), and Baosteel (China) for these products.
Mr. Tran Dinh Long, Chairman of Hoa Phat Group, shared that the project aligns with the company’s commitment to optimizing its production chain and supplying strategic steel products for key national infrastructure projects, including the planned high-speed railway connecting the North and the South of Vietnam.
Despite the uncertainty regarding the investors and equipment suppliers for the North-South high-speed railway project, Mr. Long expressed confidence in the quality and competitiveness of Hoa Phat’s high-speed rail steel. He attributed this to their home-field advantage, enabling faster progress and more efficient transportation, both vital factors for the success of the railway project.
Mr. Long emphasized the once-in-a-millennium opportunity that the North-South high-speed railway project presents for Vietnam to establish a robust and sustainable railway industry. However, Hoa Phat will focus on its strengths in manufacturing and supplying materials rather than investing in infrastructure.
SMS group, with over 150 years of experience, is a global leader in metallurgical equipment, having supplied technology to approximately 90% of the world’s high-speed rail steel producers. Since 1990, SMS has designed and implemented 14 rail steel production lines worldwide, catering to high-speed railways in the US, China, India, Europe, and the Middle East.
In Vietnam, SMS has been a long-term partner of Hoa Phat, providing technology for their integrated steel mills in Hai Duong and Dung Quat. As per the agreement, SMS group will design, supply, and install the rail and special steel production lines for Hoa Phat. The main equipment, manufactured in Germany, represents the most advanced system in Europe, ensuring uniform quality for the products adhering to international high-speed railway standards.
High-speed railway steel demands exceptional quality, requiring steel to be smelted from low-impurity iron ore, with lengths reaching 100 meters, superior flatness, and hardness. Hoa Phat assures that their products will undergo rigorous quality control using laser and ultrasonic defect detection before entering the market. The project’s products are designed to meet the highest standards of Europe, Japan, China, and other nations.
In addition to the North-South high-speed railway, Hoa Phat’s products will also cater to urban railway projects and inter-provincial connections spanning thousands of kilometers. The company is committed to producing high-quality steel for the railway, oil and gas, mechanical engineering, and defense industries, reducing Vietnam’s reliance on imports. Approximately 30% of their products are exported to various countries.
With a designed capacity of 15 million tons of steel per year by the end of 2025, Hoa Phat is currently Vietnam’s and Southeast Asia’s largest steel producer, dominating the domestic market and exporting to over 40 countries and territories.
The North-South high-speed railway project has been approved by the Vietnamese National Assembly, with a total investment of $67 billion.
Recently, two private enterprises, VinSpeed and THACO Group, have expressed interest in becoming investors for this project.
Although the project awaits the decision on the investor, the initial plan proposed by the government involves state investment.
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