News

Cost Reduction in Taiwan

Meeting Demand for Building Material in Viet Nam

Tung Ho Steel Vietnam's Rolling Mill Construction Site

(by Daigo Hayama, Ho Chi Minh, September 8) Tung Ho Steel, a leading Taiwanese electric furnace steel manufacturer, will construct new rolling mills in their Taoyuan factory site (Taoyuan, Taiwan) and in their Tung Ho Steel Vietnam site, their subsidiary in Vietnam (Phu My 2 Industrial Zone, Ba Ria-Vung Tau Province), respectively.

According to Henry Chieh-Teng Ho, Chairman and President of Tung Ho Steel, this is "to advance the company's competitiveness against competitors in Taiwan and China by reducing costs through direct rolling, and to meet the increasing demand for building materials in Vietnam." The construction in both sites has already begun and is expected to be completed by summer 2017. Tung Ho Steel is a leading Taiwanese electric furnace steel manufacturer, with production sites in the Taoyuan factory, the Miaoli factory and the Kaohsiung factory. The Taoyuan factory's annual production capacity is 1.5 million tons and the rolling capacity is 750-800 thousand tons, while the Miaoli factory's production capacity is 1.2 million tons and the rolling capacity is 800 thousand tons.

The former produces deformed bars, and the latter produces mid-large sized H-shaped steel products and steel sheet piles. The Kaohsiung factory, with an annual production capacity of 400 thousand tons, produces small-mid sized H-shaped steel products. Tung Ho Steel Vietnam became a subsidiary of Tung Ho Steel in October 2015, and currently can produce up to 1 million tons of steel per year, with no rolling capacity. Factory management began in full swing in January of this year, and the company was renamed in September (formerly Fuco Steel Corporation). The second rolling mill to be constructed in the Taoyuan factory site will have the same production capacity as the first rolling mill (750-800 thousand tons per year), and will produce the same type of products and sizes as the first mill (deformed bars D10-51).

In addition to there being surpluses in the steel-making capacity surpluses, compared to the rolling capacity, in the same factory, the direct rolling that has been employed at the first mill since 2010 has been successful, so they have decided to construct the second rolling mill.

Tung Ho Steel Vietnam will have a new rolling mill with an annual rolling capacity of 600 thousand tons. It will also replace the continuous casting machine prior to the operation of the new rolling mill. It will produce various products, including deformed bars, wire rods, small equal angle steel products, channel shaped steel products, and flat steel products. In Vietnam, it is said that deformed bars occupy about 90% of the domestic demand for building materials, but "steel distributors offer more than deformed bars, and the company will meet the needs of the domestic retail market in Vietnam by supplying a variety of products (said Huang Bing Hua, Chairman of Tung Ho Steel Vietnam)." Chairman Huang also unveiled the strategy where "the company will not employ furnaces in consideration of costs and the environment. It will use direct rolling to supply products, including deformed bars and shaped steel."