The productivity growth produced a 36% increase in sales and a 14% increase in net profit compared to the first six months of 2016.
Hoa Phat has earned more than VND21 trillion (roughly US$925 million) in total revenue and about VND3,47 trillion (roughly US$152 million) in after-tax profit since the beginning of 2017. Construction steel and steel pipes are the main contributors.
Steel consumption in Vietnam is expected to increase to 27 million tons by 2020 to meet the demand of housing provision and transport infrastructure upgrading.
In the first six months of 2017, Hoa Phat and domestic enterprises sold 7.8 million tons of steel. However, Vietnam still had to import seven million tons from China to satisfy the domestic demand.
Many projects are being carried out to reduce imports, mainly from China. This neighbour country provided half of the 6.7 million tons of steel imported into Vietnam, worth US$3.9 billion, in the first half of 2017.
Hoa Phat holds 24% market share of construction steel and 27% market share of steel pipes locally. Hoa Phat Group, Pomina, Posco SS, VinaKyoei and TISCO (Thai Nguyen Iron and Steel JSC,.) hold 70% market share.
The largest steel project in Vietnam - Formosa Ha Tinh has also been undergoing the trial period since late May. It is expected to produce 1.3 to 1.6 million tons of steel this year.
The steel business environment in Vietnam has been supported with numerous protectionist policies such as the ban on iron ore exports and the anti-dumping policy on steel. However, recent trade agreements may affect domestic steel companies in the next few years.
