Vietnam’s Hoa Phat Group, Southeast Asia’s largest steelmaker, is expanding into container manufacturing. It sees synergies with its primary steel manufacturing operation. Hoa Phat Container Manufacturing, a facility in Vung Tau province, began construction in December and is scheduled to be operational by the end of the year, with an annual output of 500,000 teu and steel made in-house.
Hoa Phat’s diversification is in response to high demand for container shipping, which has resulted in a shortage of equipment, as well as South Korea’s state-sponsored move into container manufacturing, which includes the construction of a factory in Vietnam to take advantage of the country’s lower labour and land costs.
The aim of both Hoa Phat and South Korea is to reduce Chinese firms’ monopoly in container manufacturing via majority state-controlled China International Marine Containers and Dong Fang and privately owned CXIC, which manufacture 96% of containers in the world.