Hoa Phat CEO: Making high-speed railway tracks, not without concern for profits

Hoa Phat Group is confident that the price of rail steel produced by this enterprise will be very competitive. General Director Nguyen Viet Thang emphasized, "We never determine to lose money and still rush into the work."

That is the sharing of Mr. Nguyen Viet Thang - General Director of Hoa Phat Group, when talking about the story of producing steel rails for the North - South high-speed railway.

Never identify a loss and still do it

In the September 2024 meeting, when the Prime Minister invited large enterprises to contribute to the country's economy and assigned tasks, Hoa Phat Group accepted to produce high-speed railway rails and other types of rails.

Immediately after that, Hoa Phat had a project to produce railway rails at Dung Quat 2 Complex, with a total investment of 14,000 billion VND.

Some opinions say that the group's goal is not revenue or profit, but above all, the brand mark in key national projects. However, General Director Nguyen Viet Thang affirmed that Hoa Phat has not determined how much profit it will make. Therefore, it is not correct to say that it does not care about profit.

Hoa Phat is confident in producing high-speed railway steel at competitive prices.

Based on the existing foundation, the group is always confident that the price of steel rails produced by Hoa Phat will be very competitive. He emphasized, "We never determine to lose money and still rush into the work."

According to him, for businesses, profit is still an important goal and shareholder interests are also there. Hoa Phat does not do things just for reputation. This is also the reason why in the projects that have been, are being and will be done, the group is always very cautious.

In the North-South high-speed railway rail production project, although the selling price is not yet known, the group is confident that it will have a good price and will be profitable.

Mr. Nguyen Viet Thang said that with the special mechanism of high-speed railway construction, the product is also special, sold to only one customer. It can be understood that this is a monopoly on buying and a monopoly on selling, so the two sides will sit down and discuss the price mechanism.

“If Hoa Phat can produce steel rails at a reasonable price, there is no reason for the Government to require selling at a loss. On the contrary, if the price is too high, it is clear that the State cannot buy at that price,” Mr. Thang emphasized.

A push to build the railway industry

“We will make a profit,” the General Director of Hoa Phat Group once again affirmed. But more importantly, from the high-speed rail production facility, a railway industry for Vietnam will gradually be built.

Mr. Nguyen Viet Thang, General Director of Hoa Phat Group.

"Normally, we only implement projects that can achieve efficiency of up to 90%. However, with the steel rail project for high-speed railways - an open industry - an efficiency level of 50% is also acceptable. Because this is a long-term direction, there is still a lot of room for development," Mr. Thang shared.

Mr. Thang admitted that before the North-South high-speed railway project, our country still had a need for rails, but had to import 100%. He hoped that after this project, Vietnam would have many other railway projects. At that time, instead of importing, our country could be completely self-sufficient.

Citing data from the Ministry of Construction, Mr. Thang said that from now until 2035, Vietnam may need about 1.7 million tons of rail steel. Meanwhile, Hoa Phat's factory has a capacity of 700,000 tons/year, with the ability to reserve about 150,000 tons for rail steel. Calculations show that it can produce 1.5 million tons in 10 years, corresponding to the forecast demand.

“Steel factories around the world only produce 15-20% of their total output of rails. With our current capacity, we can fully meet domestic demand.”

In particular, investing in a high-speed railway rail manufacturing factory will help Hoa Phat master the technology and own the first steel rail factory in Vietnam.

The North-South high-speed railway project with a total investment of up to 67 billion USD not only creates more jobs for businesses, but is also a boost and fulcrum for us to be determined to invest in production," Mr. Thang emphasized.

He added that this will be the foundation for the group to expand into other projects in the future, because not only the $67 billion railway project, but the scale can be up to $100 billion. In addition to steel rails for high-speed railways, there is also a great demand for rails for the Hanoi Metro, Ho Chi Minh City Metro, rails for wharves, cranes and many other infrastructure fields.

The North-South high-speed railway project was approved by the National Assembly in November 2024, with a total preliminary investment of about VND1.7 quadrillion (equivalent to USD67 billion). The 1,541km route, starting from Ngoc Hoi station (Hanoi) and ending at Thu Thiem station (HCMC), passes through 20 provinces and cities.

Designed speed of 350 km/h, load capacity of 22.5 tons/axle, including 23 passenger stations and 5 freight stations, meeting the needs of passenger transport and capable of transporting freight when necessary, while serving national defense and security goals.

Source: https://vietnamnet.vn/lam-ray-duong-sat-toc-do-cao-khong-phai-khong-quan-tam-loi-nhuan-2397530.html