Vietnam presses the “pause button” for overseas steel investment?

According to relevant media reports, after carefullyassessing the supply and demand situation and possible environmental impacts,the Vietnamese government has pressed the “stop button” for overseas investorsto build a new cold-rolled stainless steel project in Batu Vung Tau province insouthern Vietnam. This also means that after a period of development, theVietnamese government began to strengthen the planning and management of steelprojects, and gradually raise the barriers to entry.

In fact, in the past few years, as one of the fastest growingsteel demand countries in Southeast Asia, Vietnam has attracted investment frommany national steel companies including China.

According to the strategic development plan of the steelindustry previously formulated by Vietnam, from 2007 to 2025, Vietnam needs toinvest 12 billion U.S. dollars in the development of the steel industry,including 8 billion U.S. dollars from 2007 to 2015 and 4 billion U.S. dollarsfrom 2015 to 2025. At that time, the annual domestic crude steel productioncapacity in Vietnam will reach 25 million tons. Considering the economicsituation in Vietnam, a large part of the above investment will be filled byoverseas capital.

With the advancement of production targets and tasks, theVietnamese government's adjustment of the foreign investment access policy forthe steel industry is not difficult to understand due to environmental,domestic market demand and the safety of the steel industry chain. Especiallyafter the Vietnamese government claims that it will not sacrifice theenvironment in exchange for economic development, it can be foreseen thatVietnam's review of overseas investment in steel projects will become morestringent in the future.