Raw materials for the production of shipping container are hot rolled coil (HRC) weather-resistant and expensive SPA-H steel. — Photo courtesy of Hoa Phat Group

Steel maker Hoa Phat Group will start construction of a cargo container plant in June this year in the southern province of Ba Ria – Vung Tau.

The municipal Department of Planning and Investment on Monday officially granted the business registration certificate to Hoa Phat Container Manufacturing Joint Stock Company. The group has arranged enough capital to implement the project according to the committed schedule.

Raw materials for the production of shipping containers are hot rolled coil (HRC) weather-resistant and expensive SPA-H steel. Steel currently accounts for about 55 per cent of the production costs. This is a product of Hoa Phat Dung Quat Iron and Steel Production Complex. In Viet Nam, only this company has the technology to produce this type of steel.

The group has experience in large scale production, material resources and manufacturing. These factors have ensured high quality and reasonable prices for its cargo containers to be competitive with manufacturers from China, the world’s leading container producer.

In 2020, Hoa Phat exported more than one million tonnes of steel billet to the Chinese market. The production costs of the group in particular and other Vietnamese goods in general have become more competitive.

The cargo container factory project will have a capacity of 500,000 twenty-foot equivalent unit (TEU) a year, focusing on popular container products, with a length of 20-40 feet. In which, the first phase has a capacity of 180,000-200,000 TEU a year.

Vu Duc Sinh, director of the Hoa Phat Container Manufacturing Joint Stock Company said: “We chose Ba Ria – Vung Tau to set up our first factory because it is located in the driving force area of the Southeast region, close to major seaports such as Cat Lai, Cai Mep – Thi Vai and has many benefits to ensure the success of the project. It is expected that at the beginning of the second quarter of 2022, the first shipping containers under the Hoa Phat brand name will be available on the market”.

With an output of 500,000 TEU a year, the container production will need one million tonnes of HRC a year, which is a very good output for the Hoa Phat Dung Quat Iron and Steel Complex and Hoa Phat Dung Quat 2 Project. The container manufacturing is a value-added product in Hoa Phat’s iron and steel manufacturing ecosystem.

Earlier, the group recruited experienced personnel for the plant’s construction.

Though the shipping container market is growing 5 per cent annually, there has been a shortage of supply. In previous years, China had produced 90 per cent of the world’s containers. The country, however, has cut output by 40 per cent over the last two years, despite growing domestic demand. — VNS