Tung Ho Steel Enterprise Corp’s (東和鋼鐵) new production line in its Vietnam plant is to start operations in the third quarter of next year, chairman Henry Ho (侯傑騰) said on Thursday.
The company expects the new production line for making reinforcing bars to expand its production capacity and its presence in the Southeast Asian nation, he said.
With the new production line, the plant would be able supply end products to downstream customers in Vietnam, where there is increased demand for construction materials due to an overall construction boom in Southeast Asia, instead of semi-finished products, such as the steel billets it is producing now, the company said.
The company said it is using electric arc furnaces (EAF) in the plant to make the production process both cost-effective and environmentally friendly.
“The steel industry is often regarded as a high energy-consuming industry, but we hope to develop more ‘green’ steel for customers,” Ho said at a documentary premiere event in Taipei.
The documentary, titled The Secret of Steel, is to premiere on the Discovery Channel today.
The 54-year-old company supplies steel products, including reinforcing bars, H-beams and steel plates, to local construction companies. It has the largest EAF capacity in Taiwan and has multiple raw-material sources of scrap steel. It operates EAFs at its plants in Taoyuan, Miaoli and Kaohsiung to manufacture earthquake-resistant steel products.
Compared with traditional blast furnaces, EAFs are a more environmentally friendly way of making steel by using scrap steel instead of coal and iron as raw material, which in turn reduces carbon emissions by more than 75 percent, according to the company’s Web site.
Tung Ho, which is Taiwan’s largest construction steel supplier, said the Vietnam plant is expected to manufacture 200,000 tonnes of steel products this year.
The plant, which the firm acquired from Vietnam’s Fuco Steel Corp Ltd last year for NT$1.43 billion (US$45.2 million), is to reach an annual capacity of 1 million tonnes. It contributed about NT$100 million profit in the second quarter of this year, or 20 percent of Tung Ho’s total profits that quarter, the company said.
Tung Ho vice president B.H. Huang (黃炳樺) said the company’s advanced EAF production line in Vietnam conforms with local environmental standards.
“EAF is also cost-saving,” Huang said, adding that it is the main reason why the Vietnam plant started to make profits in the first quarter of this year.
Tung Ho posted a net profit of NT$899 million in the first half of this year, up 17.7 percent from the previous year.
However, the company said profit for last quarter might be weaker than expected, in light of slowing construction demand in Taiwan.
The company has yet to release its financial results for last quarter.
The company saw its consolidated sales drop 19 percent to NT$18.9 billion in the first nine months of this year, from the same period last year.
Huang said the company is relatively conservative about its sales outlook for this quarter, without elaborating.
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