The country's steel industry has great development potential, according to the Viet Nam Steel Association. — VNA/VNS Photo

HCM CITY (Biz Hub) — The country's steel industry has great development potential, according to the Viet Nam Steel Association.

Speaking at a seminar titled "Viet Nam's steel industry – rise and fall and development potential" in HCM City on Monday, Dr Nguyen Van Sua, the association's vice chairman, said per capita consumption in Viet Nam is 200kg, below the world average of 216kg.

"In an industrialised economy, the per capita consumption ranges from 500kg to 600kg."

After more than 50 years of development, the steel industry has become important in Viet Nam, he said.

This year production is expected to be 2.6 million tonnes of iron, 7 million tonnes of steel billet and 17 million tonnes of finished steel products, he said.

Viet Nam must increase its output since it is investing heavily in infrastructure to drive economic growth and cope with the rapid urbanisation, he said.

The output is expected to rise to 10 million tonnes of iron, 18 million tonnes of steel billet and 22 million tonnes of finished steel products by 2020, he said.

Currently the steel industry does not operate at full capacity, he said, adding that the country still imports a lot of steel scrap, steel billet and finished steel, with volumes increasing year after year.

Dang Tran Hai Dang, deputy director of research at Vietinbank Securities, said last year the country imported 14 million tonnes of finished steel, mostly hot-rolled steel, the sixth highest by any country.

He urged the domestic industry to invest in producing hot-rolled steel and hi-tech steel products.

Many global producers incurred severe losses due to a price drop in 2014-15, he said.

But in the second quarter of this year, a strong recovery coupled with the Ministry of Industry and Trade's safeguard measures against Chinese billet and long steel products have pushed up domestic producers' profits.

Overall, the industry achieved a clear recovery in the first nine months of this year, he said.

"It is forecast to enjoy 15 per cent growth annually over the next five years, and thus the growth opportunities are huge if companies have a suitable development orientation," he said.

Nguyen Huu Kinh Luan of SMC Trading -Investment JSC, speaking about his company's development strategy, said it would build one or two steel plants with modern technologies to ensure it can compete with local and foreign rivals.

Nguyen Ngoc Anh, the company's chairman, said the steel industry would continue to develop for another 20-30 years at least because it is hard to find other materials to replace steel.

His company would therefore continue to operate mainly in the steel sector, he said.

Organised by VietinBank Securities, the HCM Stock Exchange and SMC Trading -Investment JSC, the seminar was held to enable investors to understand more about the industry so that they can make the right investment decisions.

Tran Anh Dao, executive vice president of the HCM Stock Exchange, said the raw materials sector, of which the steel industry is a part, increased by 45 per cent in the first nine months of this year, showing how much importance investors attach to it. — VNS