Steel giant reports large losses in first half
The majority of the Viet Nam Steel Corporation's (VNSteel) associate companies have reported losses and face difficulties due to the quiet real estate market and lower market prices.
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| The majority of the Viet Nam Steel Corporation's (VNSteel) associate companies have reported losses and face difficulties due to the quiet real estate market and lower market prices.—File Photo |
The information was provided by Vu Ba On, the corporation's deputy general director, at a press conference in Ha Noi yesterday.
On VNSteel's output in the first six months of this year, On said that the corporation and its members had failed to meet half of their set targets.
All the results were much lower compared to the same period last year, excluding rolled steel and pipe production, he added.
Statistics from the corporation show that in the six-month period, steel production was over 191,800 tonnes, a drop of 30 per cent over the corresponding period last year. The market's total sales were also only 11,000 tonnes, a 84 per cent year on year decrease against last year.
The corporation, which accounts for 60 per cent of the Viet Nam Steel Association's output estimated that its turnover during this period was VND26 trillion. Of this amount, the corporation's turnover alone was VND5.9 trillion, while its associate companies earned VND10.4 trillion.
VNSteel's general director Le Phu Hung said that several companies faced losses due to the downturn in the economy.
Seven out of its 13 subsidiaries reported losses in the second quarter while other five associate companies also posted losses.
Hung said the corporation has been operating inefficiently because of increasing financial costs.
"Steel prices fell sharply in the second quarter. In addition, the country has to compete with cheap imported steel from China which is equivalent to our prices for rough steel," he added.
He said that the corporation expected to meet its target for the second half of the year.
However, he said this could be hard as steel prices were forecast to continue to keep falling while the Government had not yet introduced any specific measures to support the industry.
He asked all subsidiaries and associate companies to work together and use each others products. In addition, they should apply modern technology to save costs.
He said that companies should carefully consider investing in new projects as all their capital comes from loans.
In the near future, the corporation will only focus on the Lao Cai Steel Plant, while supporting the Thai Nguyen Steel Company to get on with its second phase.
A representative from the Ministry of Industry and Trade said the steel market would face further difficulties in the second half of the year.
Steel producers only have the advantage of a lower interest rate.
He said the corporation should enhance its competitiveness by sticking to low prices and high-quality products.
The Finance Ministry will arrange capital for both the above projects which are currently the largest ones in the sector. — VNS
