Vietnam Opens New Titanium Plant and Plans for Steel Mill

The largest titanium and high-intensity steel plant in Vietnam commenced operations this week on a 10-hectare site in the Phu My district of Binh Dinh province. According to Industrial Info Resources (Sugar Land, TX), the plant was commissioned by Saigon Quy Nhon Mineral Joint Stock Company, an affiliate of Saigon Investment Group (Ho Chi Minh, Vietnam), and has a reported investment value of $55 million.

The Binh Dinh province has reserves of titanium estimated at 10 million tons, located in protected forest areas along the coastal regions of the Phu My and Phu Cat districts. The new plant is expected to produce about 60,000 tons per year of titanium, and 30,000 tons per year of high-intensity steel. The facility will employ 500 local workers when fully operational.

The plant is being commissioned in two phases. The first phase, which consists of two furnaces from a total complement of five, will produce 24,000 tons per year of titanium and 12,000 tons per year of high-intensity steel. Using the latest technology available in Vietnam, the plant will produce titanium both for export and local demand. In later developments, the plant will also produce titanium dioxide and other compounds.

Titanium is widely used in the aerospace industry because of its low weight and high strength when produced as an alloy. Titanium alloys are also used in nuclear power plants and in specialized electronic devices.

In another development, work is reported to have started on the $74.3 million Thai Trung rolling steel mill, located 80 km north of Hanoi in the northern province of Thai Nguyen. The mill is expected to have a production capacity of 500,000 tons per year of steel round bar, section steel, and deformed bar products. Construction is scheduled for completion by the last quarter of 2010.

The mill is part of the expansion plans of Taiyuan Iron and Steel Group Company Limited (Taiyuan, China), which awarded the engineering, procurement and construction (EPC) contract for the mill to Italian contractor Danieli & C Officine Meccaniche SpA (Buttrio). Construction of the mill has already started. The plant is expected to reach 20 percent of its final capacity by the last quarter of 2010 and be operating at full capacity by 2012.

Some experts have expressed concerns about possible excesses in steel production capacity in Vietnam as a result of many projects being licensed by local authorities. The Thai Trung steel mill is a case in point. The Vietnamese Ministry of Industry and Trade has a list of 32 unplanned steel projects and has also drawn up a development plan for the steel industry. The Thai Trung project does not appear on the list and is it not mentioned in the overall strategic plan.

Despite these warnings regarding excess steel production and complaints by steel mills over losses in 2008, state-owned Vietnam Steel Corporation (Hanoi, Vietnam) is still prepared to invest 30 percent of the project value in the steel mill.