Giant steel maker Hoa Sen Group said recently it has taken a number of measures to overcome the difficulties it is facing like the rest of the steel industry and expand its business domestically and abroad.
It said steel makers are facing many difficulties as prices are unpredictable and more importing countries are adopting protectionist trade measures, affecting exports.
Besides, a lot of cheap steel is imported, causing a supply overhang, it said.
One of the solutions is to stop investing in the property and tourism sectors since returns in them are below expectations.
The company told Viet Nam News there would be no more investment in the Van Hoi eco-tourism project in the northern province of Yen Bai and Hoi Van hot spring tourism project in the south-central province of Binh Dinh.
It also sold lands it had planned to develop in Do Xuan Hop Street in HCM City’s District 9.
Pulling the plug on property investments is just one of several measures it will take to resolve its financial problems.
Another is to cut interest costs by keeping inventories to a minimum.
Other costs have also been cut by restructuring the distribution system and temporarily not opening more branches, the company said.
Besides, it is simplifying human resources and installing an enterprise resource planning (ERP) system to cut down the spending on human resources. HSG said these changes had already helped reduce loans by over VND3.1 trillion (US$136 million) since the end of June to VND12.7 trillion ($557 million).
In 2017-18 the company produced 1.8 million tonnes of steel and earned revenues of VND34 trillion ($1.5 billion), respectively up 13 per cent and 32 per cent from the previous year.
The revenues jumped both in the domestic and foreign markets, the company said.
Profit after tax was VND410 billion ($18 million).
The company holds over 35 per cent of the steel sheet market and 18 per cent of the steel pipe market, the first and second highest share in the country respectively.
It has 11 steel plants in the country 500 outlets. HSG also manufactures plastic products and aims to become among the top three manufacturers in the country. It produces 5,000 tonnes of three kinds of plastic pipes per month and sells them all over the country. — VNS