In early 2022, the National Assembly approved a socio-economic recovery package of US$15.2bn. Of the total, US$5bn will be allocated towards infrastructure development, including the Eastern North-South expressway, Long Thanh International Airport, and large logistical hubs. The Eastern North-South expressway has a total road span of 653km, with 360km expected to be completed in 2022.

In mid-2022, The Ministry of Transport (MoT) approved 12 sub-component projects for the Eastern North-South expressway project in 2021-2025, with investment of US$6.3bn. The new sub-components will cover a total length of 724km with construction commencing by end of December 2022.   

AME’s finished steel demand forecast for Vietnam in 2027 is 37.5Mt, up a moderate 5.8% from the prior year. Under Vietnam’s Eastern North-South expressway project the government is planning to have at least 4,000km of expressway completed by 2025.

Long Thanh International Airport commenced construction in early 2021 and is located 40km east of Ho Chi Minh City. The first phase of the project will have investment of US$7.8bn, with 25 million passage capacity per year, and 1.2Mtpa of cargo. The first phase is scheduled for completion by 2025.

Vietnam Electricity Group (EVN) is a state-owned enterprise which hold a monopoly on transmission and distribution. According to the Institute of Energy of Vietnam (IEV) (March 2021 report) installed power generation capacity in Vietnam is 56GW, with total installed power supply capacity of 69GW (including hydroelectric plants imported from Laos and rooftop solar power). Vietnam’s electricity capacity is expected to have an average annual increase of 5.7% from 2021 to 2030, totalling 130GW.  

AME’s finished steel demand forecast for Vietnam in 2040 is 69Mt. This equates to an average long-term (2028-2040) growth rate of 5.2%. Under Vietnam’s Eastern North-South expressway project, the government is planning to have at least 8,000km of expressway completed by 2050.

Under the second phase of the Long Thanh International Airport project, a second runway will be build and expand passage capacity per year to 50 million, with cargo capacity to 1.5Mt. The third phase of Long Thanh International Airport will see passage capacity reach 100m passengers and 5Mtpa of cargo. Phases two and three are expected to require investment of US$8.2bn.

In 2020, the Vietnamese government approved its first law on public-private partnerships (PPP), taking effect from 1^st January 2021, with the aim of attracting international investment. Vietnam’s Transport Infrastructure Master Plan from 2021-2022 has an estimated cost of US$43-US$65bn. As Vietnam aims to increase its manufacturing capacity it is vital its roads, airports, seaports, and rail connections can facilitate this increase.

Vietnam is aiming to be carbon neutral by 2050. Under its 2020 Nationally Determined Contribution (NDC), the business as usual scenario expects GHG emission to be 928MtCO2e by 2030. According to the World Bank, Vietnam’s carbon emissions have increased from 19MtCO2e in 1990 to 221MtCO2e in 2015. The country’s carbon emissions in 2020 were 322MtCO2e.

Since 2013, Vietnam has had an energy partnership programme with Denmark, which is currently in its third phase. The two governments' responsible for the programme includes the Vietnamese Ministry of Industry and Trade and Danish Energy Agency. A new agreement on the Danish Energy Partnership Programme for 2021-2025 (DEPP III) was signed in October 2021, with a grant of US$10m from Denmark to provide technical assistance to support

The partnership entails continued collaboration on energy planning, integration of renewable energy into the power grid and economical and effective use of energy in the industrial sector. Offshore wind energy development will continue to be an important area of the programme.

Vietnam’s climate commitments, as a result of the COP26 meeting held in Glasgow, includes transitioning from fossil fuel to green/clean renewable energy sources and reducing its greenhouse gas emissions. Funding for its renewable energy sector is expected to require US$24bn by 2030. Vietnam has plans to reduce its reliance on coal fired power generation. While the country’s electricity demand is expected in increase 9% annually to 2025.

According to the Ministry of Industry and Trade of Vietnam the draft proposal for the national power development plan VIII (PDP8) for the period of 2021-2030 with a vision to 2045 includes significant ramp up in renewable energy. Solar power will reach 17-18GW in 2025 and 18-22GW by 2030. While wind power will reach 11-12GW in 2025 and 12-14GW in 2030.

For its vision to 2045 solar power capacity is expected to reach 52-63GW or up to 19.5% total installed capacity. While wind power capacity will increase to 48-69GW or up to 21% of total installed capacity. 

A major steel producer that will benefit from the government infrastructure and future renewable energy projects is Hoa Phat Group. Its steel operations have been expanding rapidly in recent years with a goal to achieve crude steel output of 14Mt by 2025. The company’s construction steel is used in the government’s Eastern North-South highway project.

For the six months of 2022, the company reported its construction steel volume was 2.38Mt, up 29% year on year. Hoa Phat Group commenced operations in 1992, and expanded into steel pipe in 1996, followed by construction steel in 2000. The company was subsequently listed on the Ho Chi Minh Stock Exchange in 2007.

The Hoa Phat Group’s revenue is dominated by its steel production accounting for 90% of total company revenue. The company’s steel production includes segments of Iron and Steel – construction steel, hot-rolled coil and Steel Products – steel pipe, galvanised steel sheets, wire rod, container shell and pre-stressed bar.

The remaining non-steel related segments of Hoa Phat Group include Agriculture, Real Estate and Home Appliances. The group’s revenue has increased steadily from 2011 at US$876m to US$2.46bn by 2018. While the commissioning of the Group’s Hoa Phat Dung Quat Steel Complex, in Binh Dong has saw revenue jump to US$3.92bn in 2020 and US$6.56bn in 2021. Hoa Phat’s steel production has grown from 300kt in 2001 to 2Mtpa in 2016 and currently in 2021 to 8.5Mtpa.

In terms of sustainable development, Hoa Phat Group automatically and continuously monitors its emission from its blast furnaces iron smelting, sintering, and steelmaking. The coke plant utilises coke dry quenching which allows the heat to be recovered to generate the electricity. All the dust from the dust filter system is recycled and transferred to the sintering stage to make raw materials.   

Hoa Phat Dung Quat Steel Complex has 14 automatic and continuous monitoring stations for emissions and wastewater. This information is transmitted to the Department of Natural Resources and Environment of Quang Ngai province.  

Formosa Ha Tinh Steel Corporation also has a large market present in Vietnam and produced the first batch of 1Mt of steel in late 2017. Prior to operating in 2016, the company was responsible for the country’s worst ever environmental disaster.

The steelmaker released toxic chemicals which polluted the coastline of four provinces and impacted an area of 200km. This disaster killed 115t of fish and affected the Vietnamese fishing and tourism industries.

The steel complex is owned by Formosa Plastics Group (70%), China Steel Corporation (25%) and JFE Holdings (5%). The facility currently has a crude steel capacity of 7Mt, with future plans to expand to 10.5Mt and 21Mt by 2024 and 2029, respectively. However, since the Covid pandemic no specific expansion plans have been confirmed by the company.