An artist’s impression of the Ca Na steel project in the central province of Ninh Thuan. Photo courtesy of Ninh Thuan Province.
The Hoa Sen Group is backing off from a $10 billion steel complex in Ninh Thuan Province, saying it no longer fits its growth strategy.
The company, among the biggest steelmakers in Vietnam, said in a statement that it will sell two of six companies that are involved with the Ca Na Steel Project.
The two companies have a charter capital of VND50 billion ($2.2 million) each, and Hoa Sen will find buyers with deep pockets and experience. It will dissolve the four remaining subsidiaries.
Hoa Sen said the project no longer fits the initial vision it had when it proposed the project in 2016, aiming at a capacity of 16 million tonnes of steel a year.
The Ministry of Industry and Trade had included the project in the national steel production plan for 2025 with vision until 2035.
But in April 2016, Vietnam went through one of its worst environmental disasters caused by a unit of Taiwan conglomerate Formosa Plastics in central Vietnam.
Formosa Ha Tinh Steel, which ran a $11-billion steel plant, polluted more than 200 km (125 miles) of coastline in April, killing more than 100 tons of fish, devastating the environment and severely damaging the economies of four provinces.
Prime Minister Nguyen Xuan Phuc in April 2017 demanded that Hoa Sen’s Ca Na steel project be suspended and asked the company and Ninh Thuan authorities to review it.
The Hoa Sen Group posted post-tax profits of over VND700 billion ($30.2 million) in the first nine months of the 2019-2020 financial year, up 153 percent year-on-year.