Vietnam's steel industry makes a case for more production amid distrust

A man loads steel at a port in Hai Duong province, outside Hanoi, Vietnam June 14, 2016. Photo by Reuters/Kham/File Photo

Producers insist that the economy needs more steel in the wake of the Formosa scandal.

Steel producers in Vietnam, facing a growing tide of criticism after a devastating pollution scandal, are pushing for an increase in output to meet the demand of the fast-growing economy.

The economy, which has expanded by an average of 5 percent a year since 1999, needs more steel, said Ho Nghia Dung, chairman of the Vietnam Steel Association (VSA).

The current per capita consumption of 200kg is far below the world average of 240kg, the former transport minister said at a workshop on Tuesday.

Taking China, India and South Korea as examples, Dung said steel production and economic development go together.

“For an industrialized economy, the per capita consumption must range from 500kg to 600kg. That means Vietnam’s steel consumption remains low compared to the both global and regional average,” he said.

Vietnam must increase its annual steel output as the country is investing heavily in infrastructure to drive economic growth and catch up with the fast pace of urbanization.

Vietnam imported 9.6 million tons of steel products in the first half of this year, up 48 percent year-on-year, with imports from China accounting for 60 percent, according to industry data.

Last year the country was the biggest importer of steel products in Southeast Asia and ranked seventh among the largest steel importers in the world with 18.7 million tons.

Vietnam is still grappling with what Prime Minister Nguyen Xuan Phuc called “the worst environment disaster,” which has been linked to a multi-billion dollar steel complex.

The Vietnam unit of Taiwanese conglomerate Formosa Plastics Group was blamed for the toxic spill that severely affected four central coastal provinces -- Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue. The pollution caused mass fish deaths, ravaged local fisheries, disrupted people’s lives and hit the region's tourism industry.

Truong Thanh Hoai, head of the Heavy Industry Department under the Trade Ministry, has played down concerns for a similar disaster.

He also pointed out the case of Tokyo as a place where, according to him, steel mills and fishing communities can thrive together.

Dung, the steel association's chairman, is also aware of possible environmental impacts linked to steel production. He has assured that steelmakers in Vietnam are now being required to upgrade and adopt advanced technology.

“What matters is how the government and the public monitor steel projects,” he said.

After the Formosa scandal, there is a strong consensus that if Vietnam continues to pursue industrialization and breakneck growth at all costs, it may soon pay heavy environmental prices.

The government has warned Taiwanese steel maker Formosa not to ever again discharge toxic waste into the sea. Otherwise, the plant shutdown would be inevitable, said Prime Minister Nguyen Xuan Phuc at a cabinet meeting.

By VnExpress