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Vietnam cautiously exports steel pipe to the US   2010-07-27 - Thoi bao Kinh te Saigon

Steel pipe manufacturers in Vietnam are trying to export steel pipe products to the US. However, in the first period of “conquering” the US market, turnover is not the most important factor for Vietnamese exporters.  



Vietnamese exporters try to bring products to the US


Having cemented a firm position in the domestic market, Hoa Phat Steel Pipe Company has decided to boost exports to the US. Beginning to penetrate the biggest market in the world earlier this year, Hoa Phat has increased the export volume from 200 tonnes in the first six months of the year to 1000 tonnes in July alone, reaping one million dollars. The company plans to get the turnover of 800,000-1 million dollars a month in the last months of the year.


Other steel manufacturers have also boosted exports to the US. The 100 percent South Korean-invested SeAH exported 13,920 tonnes of products in the first six months of the year, while the 100 percent Taiwanese-invested Sun Steel exported 6,492 tonnes and the 100 percent domestic-owned Vietnam-Germany Steel Piple Company exported 2,890 tons.


According to customs agencies, in the last six months, the turnover of steel pipe exports reached $33.139 million, accounting for a half of the total turnover of steel product exports. The average export price was $1,371 per tonne.


The latest report by the Ministry of Industry and Trade showed that the rapid growth of steel pipe exports in the first six months of the year helped make the total export turnover of steel products increase sharply by 243 percent.


Analysts have pointed out that Vietnam has very big opportunities in the US market because the demand from the market is very big, approximately $3 billion worth of products per annum. Meanwhile, the world’s largest steel pipe producer in the world, China, (which makes 95 percent of the United States’ import market share) has borne anti-dumping duties of 17.7 to 39.2 percent since October 2009


“We plan to export 20 to 30 percent of our total output, 70 percent of which (10,000 tonnes) will be exported to the US,” said Nguyen Phan Duc, Deputy General Director of Vietnam Germany Steel Pipe Company. “Exporting to the US is considered a business channel that can bring foreign currencies and profit to the enterprise.”


Turnover not the top priority


Though Vietnamese products have very quickly penetrated the US market, exporters still keep cautious when exporting products to the US. This is because Vietnamese enterprises not only want to penetrate the market but cement their firm positions there.


SeAH is planning to set up its third steel mill in Vietnam. Meanwhile, Hoa Phat has put its second factory in Binh Duong province into operation which has the total investment capital of $10 million since late 2009. The factory specializes in making products for export.


For many steel manufacturers, the turnover is not the most important factor they are striving towards.


“Last year, we signed many contracts, but our production capacity was limited. We have decided not to run after the quantity now, while we will focus on improving the quality and giving deliveries on schedule,” Duc said.


“The number of orders also is not the most important factor for us,” said Do Hai Yen, Head of the Import-Export Division of Hoa Phat Company, adding that Hoa Phat once refused some orders because the export prices were lower than the domestic prices.


The thing Vietnamese exporters need to take care for when exporting products to the US is the strict requirement of the market (API and ASTM standards). Therefore, when upgrading production lines to make products for export, Vietnamese manufacturers at the same time can improve the quality of the products for domestic consumption.

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