The latest Ca Na Steel Complex to be given a license in September 2008 is of Malaysia's Lion Group in joint venture with Vietnam Shipbuilding Industry Group (Vinashin). Total area of the project is 1,650 hectares of ground surface and 330 hectares of sea surface with total estimated cost of about US$9.79 billion. The construction will start in January 2009 and its first stage is expected to finish in January 2011.

Earlier, in July, Taiwan's Formosa Group broke the ground for Son Duong Formosa steel and cast iron complex on a site of over 3,000 hectares in Ha Tinh province's Vung Ang Economic Zone and the first stage cost is US$7.8 billion. After completion, the complex can receive 30,000-300,000 tonnage ships. Work on Tycoon-E.United Steel Complex in Dung Quat EZ also began in end 2007, and other two projects (one, a join venture between India's Tata Group and VnSteel in Ha Tinh, and another of Korea's Posco Group in Van Phong Bay) are under consideration.

The steel projects cover a fairly large land area and are in locations where investors can develop deepwater ports and take advantages of natural minerals like Thach Khe ore in Ha Tinh province.

Notably, Formosa steel project is 100% owned by Taiwan while in the India-Vietnam steel joint venture, Tata holds 65% and Vietnamese partner 35%. Therefore, clearly Vietnam is unable to take advantage of minerals to build Vietnam made steel brand name.

Based on Vietnam's steel demand in the next 10-15 years, when the foreign invested steel projects come into operation, the country's steel supply will be much higher than the domestic demand while the neighbouring China with the steel output 100 times higher than Vietnam always offers a lower price than Vietnam's. Foreign steel investors may take full advantage of Vietnam in terms of materials and locations.

Economist Pham Chi Lan stated that we have to calculate to balance interests of investors and long-term interest of the country.

Sai Gon Giai Phong - November 15, 2008