Vietnam’s businesses ‘swim against the current’, boost exports during Covid-19
The enterprises of US dollar billionaires have been thriving despite the pandemic. They are doing well in Vietnam, and making their mark in the world market as well.
Hoa Phat Group of the dollar billionaire Tran Dinh Long has released good news. Its structural steel market share has soared to 32 percent, which means that it took the steel manufacturer only three years to obtain another 10 percent market share instead of seven years as it did in the past to obtain an additional 10 percent.
President of Hoa Phat Tran Dinh Long
Finished steel products, ingot steel and corrugated iron all saw sharp increases compared with the same period last year. Corrugated iron had a sharp growth rate of 145 percent, while steel pipe exports in the first eight months of the year reached 13,668 tons, a y-o-y increase of 23.3 percent.
Hoa Sen Group of Le Phuoc Vu has reported sharp increases in revenue and profit in the first nine months of the 2019-2020 fiscal year (April 1 – June 30, 2020).
Analysts said the good news is Vietnam’s businesses are not only doing well in the domestic market, but also have increased exports to large markets, including China.
Hoa Phat has recently increased steel exports to India, the US, Mexico, Thailand, Indonesia, and to new markets such as Kenya, Ghana in Africa, and China.
In May 2020, Hoa Phat for the first time received a big order of exporting 120,000 tons of ingot steel, worth over VND1 trillion, to China. The order came at a time when the business community was facing big difficulties because of Covid-19.
Prior to that, analysts warned that Chinese steel would flood the Vietnamese market in the post-Covid-19 period. But what is happening shows the opposite: Vietnam’s steel is being shipped to China.
In 2019, Hoa Phat exported 195,000 tons of ingot steel, of which 190,000 tons went to China. Ingot steel exports have increased sharply since the beginning of the year, not only to China, but to ASEAN countries as well.
Chinese steel mills need big billet supplies at reasonable prices to produce more steel products to take full advantage of the Chinese government's accelerating public investment, aiming to boost economic growth in the country in the context of Covid-19.
Hoa Phat has also begun exporting steel products to Africa after entering choosy markets, including Japan and the US.
Hoa Phat and Hoa Sen were the two corporations making big profits in H1, while many other businesses were struggling to survive amid the impact of the Covid-19 pandemic.
Hoa Phat reported post-tax profit of VND2.743 trillion in Q2, up by 35 percent, the highest quarterly profit Hoa Phat has gained so far.
The COVID-19 pandemic has led to many construction and real estate projects being delayed, resulting in large inventories of construction materials, especially steel.
The global coronavirus developments coupled with the falling demand are adding more pressure for some steelmakers to lay idle their projects, cut products, or ponder mergers and acquisitions strategies to ensure their cash.