Taiwanese-invested steelmaker Formosa Ha Tinh Corp incurred a loss of over VND5.2 trillion (US$200 million) in 2017 and another VND2.7 trillion (US$110 million) in 2018 due to depreciation and interest repayment although the firm has been given preferential treatments.
Formosa is a world-scale project with the actual capital by the end of 2017 amounting to US$12.87 billion.
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Formosa is a world-scale project with the actual capital by the end of 2017 amounting to US$12.87 billion.
Categorized as a large-scale project, the company enjoys many favorable policies from the Vietnamese government including income taxes and land rental incentives.
After over a half year of operating the second blast furnace, Formosa produced over two million tons of crude steel including 1.6 million tons for internal consumption, 300,000 tons for the Vietnamese market and nearly 159,000 tons for export. Its crude steel production made up about 40% of the domestic steel market.
According to Vietnam Steel Association’s statistics, Hoa Phat still leads in construction steel sales, taking a 25.7% share of the market while Formosa ranked first in steel roll coil sales with 227,000 tons over the first four months of this year.
In the steel business alone, Formosa’s revenue is nearly 40% higher than that of Hoa Phat. Formosa is the only hot-rolled coil producer in Vietnam at present.
In 2016, Formosa discharged wastewater into the sea along the coastline of three central provinces of Ha Tinh, Quang Tri and Thua Thien –Hue, making thousands of local fishermen and tourism workers jobless.
The incident was reportedly destroying the maritime ecosystem and seafood resources and affecting about 510,000 people, according to government reports.
Late in June 2016, Formosa admitted responsibilities, committed to compensate US$500 million for the Vietnamese government, and pledged to fix the environmental damage.
