Vinashin faces criticism for moving into steelmaking

VietNamNet Bridge reported that the Vietnam Shipbuilding Industry Group is now facing criticism for moving into steelmaking, an area where it is considered to have little expertise.
However, Vinashin denies the charge saying it has every reason to follow a steel project.
The Vietnam Steel Association has sent a dispatch to the Government Office, requesting it considers the Vinashin's plan to expand the steel project in Quang Ninh province to have the capacity of 1 million tonnes per annum. The association said that making steel for building ships is really not an area where Vinashin has much experience. VSA warns that Vinashin’s project will be unfeasible, while Vinashin continues to complain that it does not have enough capital for investment projects.
However, Vinashin continues to maintain that it needs to develop the project in order to take the initiative in plate steel supply and allow them to improve the group' competitiveness.
Mr Pham Thanh Binh chairman of Vinashin said that currently, Vinashin has to import steel from the shipbuilding rivals, which means Vinashin has to find more money and it takes more time. If we continue purchasing steel from them, we will be less competitive than foreign shipbuilders in terms of prices, or we will have to accept lower profits."
According to Mr Nguyen Tuan Duong, general director of Cuu Long Vinashin, the general contractor of the steel project in Quang Ninh, plate steel makes up 20% 25% of the production cost of a ship. If including machine’s parts, steel accounts for 90% of a ship.
Mr Binh said that if shipbuilders purchase steel from domestic manufacturers, they will be able to save GBP 100 million a year thanks to the lower prices of up to 20%. He admits that Vinashin faces big problem due to capital shortage, and he says Vinashin has to inject money in the steel project.
Regarding the implementation of the project, Mr Duong said that Vinashin would be the 100% investor and the group would execute the project itself. He added that "We have been facing major difficulties in terms of capital. Meanwhile, foreign partners set too many claims on prices for the mill installation. Therefore, the group has decided to undertake the project itself and has assigned the project to Cuu Long Vinashin."