The situation of 12 major shelved projects: Is there any way to save Thai Nguyen Iron and Steel Joint Stock Corporation?

VCN – With huge investment capital, for many years, the second phase of TISCO’s (Thai Nguyen Iron and Steel Joint Stock Corporation) production expansion project has been in a difficult cycle, with construction stall.
tin nhap 20190603144004 The situation of 12 major shelved projects: Revival of Dinh Vu fibre factory
tin nhap 20190603144004 Binh Duong and Thai Nguyen exceeded Bac Ninh on exports
tin nhap 20190603144004 Thai Nguyen industrial zones target US$200 million in investment
tin nhap 20190603144004
Up to now, TISCO has completed the Draft plan to solve the Project’s problems with the MCC General Contractor. The plan is being submitted to authorities to continue negotiating with the contractor. Photo: Nguyen Thanh

Serious financial imbalance

The second phase of TISCO’s production expansion project started in September 2007 but has been suspended since the first quarter of 2013 due to difficulties in arranging capital because the project was prolonged and the total investment was adjusted up (from 3,843 billion VND in 2005 to 8,104 billion VND in 2013, an increase of 4,261 billion VND compared to the initial figure - Reporter). The EPC contract that was signed between TISCO Investor and China General Contractor, which is Metallurgical Construction Corporation (MCC), has faced many unresolved problems. This made the project prolonged and difficult.

According to a report of the Ministry of Industry and Trade, due to difficulties in capital, production and business, in the first three months of the year, TISCO’s rolled steel production reached only 185,000 tonnes; billet production reached 87,200 tonnes; blast furnace iron production reached 47,500 tonnes; consumption of rolled steel reached 208,000 tonnes; revenue reached 3,535 billion VND; profit reached 10 billion VND and the company paid 106 billion VND to the State budget.

In the financial report to its shareholders in early April, TISCO leaders admitted the company was in an extremely difficult situation, with serious financial imbalance. The risk of financial crisis leading to bankruptcy is great without a timely rescue from the Government, banks and competent authorities. The data showed that, although TISCO’s charter capital by the end of 2018 was nearly 1,937 billion VND, its liabilities accounted for about 82% of the capital structure.

The Ministry of Industry and Trade revealed that in recent years, the Steering Committee of the Government, ministries and agencies have implemented the withdrawal of 1,000 billion VND of State Capital Investment Corporation (SCIC) contributed to the project, preserving State capital. At the same time, the investor cooperated with APAVE-VNCC Supervisory Consultant to work with MCC Contractor and Vietnamese subcontractors to review and finalise the volume of work done, and determine the amount of work to be continued.

Focus on divesting State capital

The biggest difficulty in the second phase of TISCO’s production expansion project is that problems in the EPC contract with MCC contractor have not been solved. Therefore, the project is still suspended. The guarantee obligations of Vietnam Steel Corporation (VNSteel) for TISCO's loan to Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) have not been released yet.

At a meeting of the Steering Committee dealing with shortcomings and weaknesses of some shelved and inefficient projects and enterprises of the Industry and Trade sector which took place at the end of March, Deputy Prime Minister Vuong Dinh Hue stated: "For TISCO's project, it is necessary to make a report to consult the ministries. The project should be thoroughly dealt with and its problems need to be continuously handled when the project is moved to SCIC. There are two issues to be solved before equitisation. One is to deal with the EPC contract; the other is to disburse the guarantee of VnSteel. Comrades at the State Capital Management Committee in enterprises need to direct SCIC that after receiving the project, SCIC needs to include the plan: if the two above problems have not been solved, to reduce losses and damage, whether that equitisation is possible or not, whether state capital is continuously divested or not in that condition. Just hand it over, after moving to SCIC, the project will be recalculated and reported to the Steering Committee for further handling”.

TISCO has completed the Draft plan to solve the Project’s problems with the MCC General Contractor. The plan is being submitted to competent authorities to continue negotiating with the contractor. VNSteel is also implementing a State divestment plan at TISCO under the direction of the Government and working with VietinBank on the release of the corporation's guarantee obligations for TISCO's loan to the project.

The Ministry of Industry and Trade stated that it was necessary to focus on implementing the plan of State divestment under the direction of Deputy Prime Minister Vuong Dinh Hue in two cases. The first case, complete the settlement of the EPC contract dispute of the Project and resolving VNSteel's guarantee for TISCO at VietinBank. The second case, when these two problems could not be resolved, it was necessary to report to SCIC to submit to the State Capital Management Committee after the Ministry of Industry and Trade handed over the right to represent the State owner at VNSteel to SCIC.

In 2017, although the second phase of TISCO’s production expansion project was still under construction and being suspended from construction to solve its obstacles, the first phase of the Project still had stable production and business activities. TISCO’s production of rolled steel reached 739,390 tonnes; consumption of rolled steel was 744,676 tonnes; billet production reached 412,012 tonnes; production of blast furnace iron reached 168,125 tonnes; exploitation of iron ore reached 667,673 tonnes; exploitation of fat coal was 146,237 tonnes; revenue reached 9,824 billion VND; profit before tax reached 121.2 billion VND, and the company paid 394 billion VND to the State budget.

tin nhap 20190603144004 3,500 tons of TISCO waste steel cleared

VCN- About 3,500 tons of waste steel imported by Thai Nguyen Iron and Steel Joint Stock Corporation ...

In 2018, TISCO’s production of rolled steel reached 788,567 tonnes; consumption of rolled steel was 761,901 tonnes; billet production reached 408,261 tonnes; production of blast furnace iron reached 199,834 tonnes; exploitation of iron ore reached 477,681 tonnes; exploitation of fat coal was 123,016.43 tonnes; revenue reached 12,254.47 billion VND; profit before tax reached 35.95 billion VND, and the company paid 186 billion VND to the State budget.

By Thanh Nguyen/ Ha Thanh

Related News

Green transformation: It

Green transformation: It's time to force businesses to "get involved"

VCN - Implementing ESG (environment, society, corporate governance) and green transformation has become a mandatory requirement for businesses to achieve sustainable development.
Accelerating investment to meet "green" standards

Accelerating investment to meet "green" standards

VCN – Many businesses are implementing large-scale investments in technology, energy transitions, and production processes to meet the increasingly stringent "green" criteria set by the EU market.
Electronics industry overcomes challenges to penetrate deep into global supply chain

Electronics industry overcomes challenges to penetrate deep into global supply chain

VCN - In addition to the opportunities from the investment shift in the electronics industry, Vietnamese enterprises also face many challenges in terms of capital, technology and human resources. Ms. Do Thi Thuy Huong, Executive Committee Member of the Vietnam Electronics Industry Association (VEIA), shared about the future directions for this potential industry.
Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.

Latest News

Embracing green exports: a pathway to enter global supply chains

Embracing green exports: a pathway to enter global supply chains

This shift presents both a challenge and an opportunity for Vietnamese businesses to innovate and enhance their competitive edge in the international arena.
New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

The ministry proposes to issue a decree on the establishment, management and use of the Investment Support Fund to stabilise the investment environment, encourage and attract strategic investors and multinational corporations.
Việt Nam’s durian exports to China plummet by 80%

Việt Nam’s durian exports to China plummet by 80%

This sharp decline has had a direct impact on Việt Nam’s fruit and vegetable export revenue, which stood at US$416 million in January 2025, marking a 11.3 per cent decrease month-on-month and a 5.2 per cent drop year-on-year.
Coconut exports reach 14-year high

Coconut exports reach 14-year high

In 2024, fresh coconut and coconut product exports surpassed US$1 billion, marking the highest figure in the past 14 years.

More News

Shrimp exports grow in the first month of 2025

Shrimp exports grow in the first month of 2025

According to data from the Việt Nam Association of Seafood Exporters and Producers (VASEP), shrimp products recorded a 13 per cent increase in export value in January 2025, reaching a total of $273.3 million.
Rice export prices drop, but decline expected to be short-term

Rice export prices drop, but decline expected to be short-term

Việt Nam’s rice export prices have declined, reaching their lowest level in three years.
Key agro products expected to maintain export growth this year

Key agro products expected to maintain export growth this year

At present, agricultural exports, such as rice, coffee and seafood, have steadily secured a stable place in major global markets.
EU issues 12 warnings against Việt Nam’s food and agricultural exports

EU issues 12 warnings against Việt Nam’s food and agricultural exports

The Việt Nam SPS Office has reported that some Vietnamese export products failed to meet the EU’s stringent standards.
Việt Nam to impose VAT on low-value express-imported goods

Việt Nam to impose VAT on low-value express-imported goods

Việt Nam will end a previous policy that exempted imported goods valued under VNĐ1 million (US$39.4) from taxes when shipped via express delivery.
Exchange rate risks need attention in near future

Exchange rate risks need attention in near future

VCN - Exchange rate developments in 2025 are considered to be quite complicated due to US policies related to trade and investment.
Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month

Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month

VCN - Data from the General Department of Vietnam Customs indicates a softening of both exports and imports in January 2025, relative to the same month in 2024.
Import and export turnover reaches about US$29 billion in the second half of January 2025

Import and export turnover reaches about US$29 billion in the second half of January 2025

VCN - Vietnam's total import and export turnover in the second half of January 2025 (January 16-31, 2025) reached US$28.9 billion, the latest preliminary statistics of the General Department of Vietnam Customs reported.
Market edges up slightly as liquidity remains low

Market edges up slightly as liquidity remains low

Market breadth remained positive, with 161 gainers outnumbering 144 decliners.
Read More

Your care

Latest Most read
Embracing green exports: a pathway to enter global supply chains

Embracing green exports: a pathway to enter global supply chains

This shift presents both a challenge and an opportunity for Vietnamese businesses to innovate and enhance their competitive edge in the international arena.
New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises

The ministry proposes to issue a decree on the establishment, management and use of the Investment Support Fund to stabilise the investment environment, encourage and attract strategic investors and multinational corporations.
Việt Nam’s durian exports to China plummet by 80%

Việt Nam’s durian exports to China plummet by 80%

This sharp decline has had a direct impact on Việt Nam’s fruit and vegetable export revenue, which stood at US$416 million in January 2025, marking a 11.3 per cent decrease month-on-month and a 5.2 per cent drop year-on-year.
Coconut exports reach 14-year high

Coconut exports reach 14-year high

In 2024, fresh coconut and coconut product exports surpassed US$1 billion, marking the highest figure in the past 14 years.
Shrimp exports grow in the first month of 2025

Shrimp exports grow in the first month of 2025

According to data from the Việt Nam Association of Seafood Exporters and Producers (VASEP), shrimp products recorded a 13 per cent increase in export value in January 2025, reaching a total of $273.3 million.
Mobile Version