Iron and Steel Industry Vietnam Research Papers (original) (raw)

The aim of this paper is to examine the attainments and challenges of the iron and steel industry in Viet Nam. The demand for steel in Viet Nam is increasing, with a focus on construction steel. While low-level industrialization is a restraining factor for the industry, the high steel intensity of the economic structure is a promotional factor. Steel production is increasing in line with domestic demand. Private and foreign-affiliated enterprises are the main players in the expansion of steel production. Market selection based on survival of the fittest is working well. In general, the transition to a market economy is showing considerable results in Viet Nam. However, the industry still faces some challenges. While the low operating ratio due to excess capacity is a by-product of market-oriented reform rather than governmental intervention, the poor performance and governmental support of state-owned enterprises show an insufficiency of reform.

- by Nozomu Kawabata
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- Industrial development, Iron and Steel Industry Vietnam

This study discusses the development of the Vietnamese iron and steel industry under international economic integration. In particular, this study investigates what type of enterprise was responsible for this development, as well as the economic and managerial logic that can explain this development. The analysis provides suggestions for industrial development under international economic integration in developing economies.
Under trade and investment liberalization, private enterprises and foreign capital firms have been the main participants in the development of the Vietnamese iron and steel industry. However, such development did not occur via a simple laissez-faire approach. Each enterprise type and the government faced challenges. Ownership and management reform were required of state-owned enterprises, and local private enterprises had to ensure market creation through innovation, by making full use of the local condition. Foreign enterprises had to introduce the huge funds and state-of-the-art technology. Moreover adaption to local society influenced their projects’ progress. Thus, the government should review and monitor large-scale projects from both economic and social viewpoints. The Vietnamese iron and steel industry recorded steady growth because some of these conditions were met, while some unachieved conditions caused problems.
This case suggests that industrial development under international economic integration is possible. In addition, such integration requires not only a market mechanism but also an entrepreneurial spirit that encourages market creation and government policies that complement the market’s role and resolve social issues.

This paper examines the growth of Hoa Phat Group and Hoa Sen Group, two private companies in Vietnam, and their achievement of leading status in the long and flat sectors of the local iron and steel industry. Both companies have benefitted from innovations in the production system and market-oriented management that exploited local market conditions and factor endowment. Compared to state owned enterprises and other private companies, HPG and HSG exhibited speedier and more valiant managerial behaviors. Moreover, they adopted technology and focused on market segments ignored by foreign companies. HPG’s organizational behavior is regarded as catch-down innovation while HSG demonstrated the initial stage of disruptive innovation. However, both companies have been forced to adapt their corporate strategies with the disappearance of favorable local conditions given global competitive pressures.

本稿の目的は、市場経済移行下におけるベトナム鉄鋼業の達成と課題を明らかにすることである。ベトナムでは、工業化水準の低さに制約されながらも、鋼材集約度が高い経済構造に助けられ、建設用鋼材を中心に鉄鋼需要が拡大している。そして、鉄鋼業は、総じて言えば、民間企業や外資企業を中心的担い手として、拡大する国内市場を獲得して生産を拡大させている。競争による優勝劣敗の選択が正常に機能しつつある。すなわち、市場経済移行の効果は着実に上がっている。能力過剰が設備稼働率を低迷させていることなど課... more