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 4 years, a loss of over trillion

Posco VST trajectory in VN started in late 2009, when the company put $ 50 million acquisition of a factory in Dong Nai stainless steel with a capacity of 30,000 tonnes / year, before lifting to 85,000 tonnes / year.

 

Together, the month 3/2012, Posco VST has also launched factory new cold rolled stainless steel capacity of 150,000 tons / year. With the new factory has a total investment of approximately USD 130 million, the total production capacity of Posco VST at up to 235,000 tonnes VN steel / year.

 

According to the Posco VST data are given, in the first year of investment in VN company had revenues of $ 200 million. According to the plan of the company, sales of the company in 2014 after the new plant operating at full capacity will reach nearly 530 million, and meet 70% demand of stainless steel in VN.

 

However, profitability of this company were not positive as revenue growth and market share.

 

According to data from the tax authorities have been confirmed, since investment in VN 2009, Posco VST has accumulated losses amounted to 1.067 billion. Worth mentioning, the losses rise year over year. Specifically, in 2009, nearly 127 billion hole Posco VST, 2010 rose to nearly 139 billion loss figure was 202 billion in 2011 and to last year 2012, it jumped to nearly 384 billion.

 

Inversely proportional to the number of holes "crisis" above, but the company tax pile of Korea submitted to the Dong Nai Department of Taxation where companies stand foot just has not reached 50 billion.

 

There would be nothing to talk about losses, Posco VST's interest if the company does not produce cold-rolled steel, the type of product to use as raw material, hot-rolled steel that the company imported from parent Posco in Korea.

 

Price signs with Posco VST posed, to know there are times when this company importing material, hot-rolled stainless steel from its parent company for nearly the price of cold-rolled stainless steel products.

 

The raw material cost structure is too large proportion of the final price, beyond question the price signs, and partly shows the ratio of surplus value generated from the production of cold rolled stainless steel Posco VST is negligible. According to the steel companies, this stage represents only 10-15% of the product.

 

This is really worrying in the current circumstances when Vietnam is very difficult to deal with the phenomenon of large FDI him repeatedly reporting losses while expanding production. The case shocked public opinion in recent days is also an investor from South Korea - Keangnam Vina.

 

The investor Keangnam Tower were investigating authorities are determined to carry forward price forward price totaling up to 1.220 billion through increased control the amount paid to the EPC (Keangnam Enterprise) and Kookmin Bank Bank - which is linked units of this business in Korea.

 

As disturbed from lawsuits

 

Under the original plan, the preliminary conclusions on this case duocCuc Competition Authority (MOIT) issued on 2/10. However the date of this ruling has been postponed to June 12/2013.

 

Not to mention the pressing arguments are given to demonstrate the unreasonableness of petition sheets Posco VST and Inox Peace, what most concerns companies located in the "prerequisites" of service this event: as plaintiff's lawsuit.

 

Firstly, under the Anti-Dumping Agreement (AD) that VN's WTO membership and the provisions of VN on antidumping investigation for application of anti-dumping measures will be initiated when required by text submitted by organizations and individuals representing the domestic manufacturing sector.

 

Specifically, the VN AD Ordinance (Ordinance 20) defined domestic industry "shall be understood as the entire domestic producers or groups of producers that their production together account for one billion for most of the total domestic output, unless the manufacturer has a relationship related to the exporters or importers, or when they themselves are the product importers alleged dumping. .. ".

 

Thereby, we can see as well as stainless steel Posco VST Peace not meet the criteria of "domestic industry", because besides Posco VST and related companies of this company has imported similar products from before and during the investigation period, the data that the units have relevant interests in this proceeding suggests collected and Posco VST related companies as Posco VHPC continued imports of cold rolled stainless steel from the related companies abroad as Asia Posco, Daewoo International Corporation - subsidiary has 65% shares of Posco and Posco - Thainox) in the period from January - 8/2013. Import data showed that, of the total imports of Posco and Posco VST 8/2013 VHPC month up to 3,600 tons, in total about 6,400 tons of total import volume in the country.

 

Similarly, inox Peace and subsidiary TM Huy Hoang Company imports products, cold-rolled stainless steel from countries under investigation in the said period.

 

In addition, the manufacturing process of the company producing cold-rolled stainless steel at present VN are not a closed process, as raw material for stainless steel cold-rolled, hot-rolled stainless steel is currently no production VN be.

 

According to the production process of the normal closed major manufacturers worldwide as outo Kumpu, Thyssen Krupp, Yusco and LISCO, the input material is ore and scrap, according to the manufacturing process from ore, scrap into workpiece, and hot-rolled steel production, from which the processing of cold-rolled steel. Meanwhile, Posco VST simply produce cold-rolled steel from hot rolled raw material is imported from related companies as Posco Asia and Daewoo International Corporation.

 

In addition to only add 10% - 15% of the value of the final product, according to the company, this process uses very little labor, while consuming a very large amount of power. These factors are difficult to match the goal of attracting FDI in Vietnam is to address labor needs and called for investments and projects of energy saving and environmental safety.

 

Because of this problem, more than 70 companies have proposed VCA decision to terminate the anti-dumping investigation that Posco VST and Inox Peace initiative.

 

So far, all developments of the investigation was still in front, and the implications resulting from this litigation is still assumed. But a very clear damage has occurred, since this case is handled, many domestic manufacturing firms have stopped imports of cold rolled stainless steel from the defendant in Indonesia, Malaysia, China and Taiwan Taiwan (China).

 

By the rules, if the volume of imports during this period, the spike importers may be recollected a huge taxes. "The problem is nobody knows in advance how levels are considered" mutants "and rate can be recollected as much, so we ended up stopping the import of raw materials," said Pham Trung Anh - Chairman Gia Anh Joint Stock Company said.

The reason for this is considered as major damage, because in addition to the production capacity of Posco VST and Inox Peace not meet market demand, product quality, cold-rolled stainless steel which Posco VST sold to enterprises in gripes water quality. This issue we will discuss in the next post.

 

Hong Ky