Hoa Phat will produce containers


Hoa Phat plans to produce 500,000 TEUs per year in two areas near the Hai Phong seaport and the Southeast

Hoa Phat Group (HPG) has just decided to produce an empty container based on the recent assessment of market demand.

Speaking to VnExpress , Mr. Nguyen Manh Tuan, Vice Chairman of the Board of Directors, General Director of Hoa Phat Steel Pipe and Color Steel Corporation, said that the group plans to produce 500,000 TEUs per year in two areas near seaports. is Hai Phong and the Southeast.

The first factory of Hoa Phat is expected to be in the South, Binh Duong or Dong Nai province, close to Cat Lai, Cai Mep – Thi Vai ports. According to Hoa Phat’s research, in recent years, 70% of container demand has come from the South. Only 1 out of 4 containers is used in the North.

Mr. Tuan said that the raw material for the production of empty container shells is HRC steel, special grade SPA-H, natural resistance, weather resistance and is a product of the Dung Quat 2 project of Hoa Phat. With an estimated output of 500,000 TEUs per year, container production will absorb 1 million tons of HRC hot rolled coil – the output product of Dung Quat 2 Project.

“Container is a value added product located in the steel production ecosystem of Hoa Phat”, Mr. Tuan commented.

Currently, Hoa Phat is recruiting personnel to immediately start building the factory. It is expected that at the beginning of the second quarter of 2022, Hoa Phat can supply its branded empty container to the market. With a large factory capacity, the price is expected to be “very competitive”.

Currently, the global logistics industry and Vietnam are struggling with the shortage of containers . Due to Covid-19, the liberation and rotation of empty containers were delayed, while the sudden increase in the demand for exporting goods to Europe and the US resulted in serious scarcity of containers.

By the end of 2020, the Vietnam Maritime Administration has asked container shipping lines to make their freight rates transparent. The reason is that this agency has received many reflections on the situation of shipping container shipping lines increasing prices, high surcharge for container shipping services or lack of empty containers for export, no shipping ships.

In the past three months, container rental prices have increased continuously, from 2 to 10 times. Many businesses reflected that the increase in freight rates made export difficult, high inventories, even bankruptcy.

In Vietnam, there are a few dozen enterprises operating in relation to containers (excluding service businesses), but most are not true manufacturing enterprises. Some enterprises used to produce containers, but due to objective conditions, they had to narrow their production. The rest are mainly repair and renovation businesses.

Mr. Tuan explained, the price of special steel for container construction is very expensive, if businesses import this type of steel for container production, they will definitely lose. “Meanwhile, Hoa Phat’s advantage is that it can produce this type of steel, so the group can ensure the success of the project,” said Mr. Tuan.