Chinese factories now account for more than 96% of the world's dry container and 100% of the reefer container market, and Vietnam is joining the fray and is providing the world with a new container export destination.
Vietnam's Hoa Phat Group, Southeast Asia's largest steelmaker, is making a foray into container manufacturing.
It sees potential synergies with its core steel production business.
Hoa Phat started construction of its plant Hoa Phat Container Manufacturing in Vung Tau province in December and is expected to be operational by the end of this year with an annual production capacity of 500,000 TEUs, all using steel produced in-house.
Two South Korean companies - Seojin Systems and Ace Engineering - have also built container factories in northern Vietnam, which are expected to be operational later this year.
Hefa Group: Plans to supply containers to the market in the fourth quarter
Nguyen Manh Tuan, vice chairman of Hoa Phat Group, said: "Shipping containers are part of the Hoa Phat company ecosystem, and Hoa Phat started building the container manufacturing plant amid a global shortage of shipping containers."
Hefa Group planned to start construction of the factory in June 2021, but due to the impact of the fourth wave of the new crown epidemic, the project was officially launched in November 2021, five months later than planned.
But after 3 months of construction, 5 workshops, with a total construction area of nearly 7 hectares, began to erect columns. On February 22, 2022, the construction of the first truss of workshop 5 was completed.
Vu Duc Sinh, head of the container manufacturing division of Hoa Fatt Group, said the first machines and equipment at the plant are expected to arrive this month and construction will be fully completed by April. The construction of the factory is accelerating. There are 3-5 contractors on the construction site, who distribute the projects equally and strive to complete the capital construction within 6 months from the date of commencement of construction. We want to build factories as soon as possible to take advantage of the shortage.
In Vietnam, Hoa Phat was the first container manufacturer. Tuan explained that the high price of weathering hot rolled coil steel used to make containers would cost the company if imported, and we at Hoa Phat can produce this steel.
The Hefa Group's container factory will be commissioned in the third quarter of 2022, and products will be brought to market from the fourth quarter of this year. The plant is expected to have a capacity of 200,000 TEU per year by the end of 2023.
