Skip to main content
SpringerLink
Log in
Book cover

Management for Sustainable and Inclusive Development in a Transforming Asia pp 255–271Cite as

Development of the Vietnamese Iron and Steel Industry Under International Economic Integration

  • Chapter
  • First Online:

  • 536 Accesses

Abstract

This study discusses the development of the Vietnamese iron and steel industry under international economic integration. Through trade and investment liberalization, Vietnam has become the largest steel producer in Southeast Asia. However, such growth did not occur via simple market adaptation behavior or a laissez-faire approach. The government as well as all types of enterprises have faced several challenges. Ownership and management reform were required of state-owned enterprises (SOEs), and local private enterprises had to ensure market creation through innovation by making full use of the local conditions. Foreign enterprises had to introduce huge funds and state-of-the-art technology. Moreover, adaptation to local society influenced the projects’ progress. Thus, the government should review and monitor large-scale projects from both economic and social viewpoints. This case suggests that industrial development under international economic integration is possible. In addition, such integration requires not only a market mechanism but also entrepreneurial behavior that creates new markets as well as government policies that complement the market’s role and resolve social issues.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   119.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   159.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD   159.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    There are various views on the government’s role in the development of the Japanese steel industry. However, no researcher denies the important role of the government before World War II or during the wartime and recovery periods. See the survey by Nagura (2015).

  2. 2.

    On the development of the South Korean iron and steel industry centered on POSCO, see Mitsubishi Research Institute (1981), Park (1989), Juhn (1991), D’Costa (1994, 1999), Fujimoto (2009), Abe (2016).

  3. 3.

    On the development of the Taiwanese iron and steel industry centered on the China Steel Corporation, see Syu (1995) and Sato (1999, 2008).

  4. 4.

    For Vietnam in the 1990s, see Imaoka and Ohno (1999, p. 215).

  5. 5.

    In this study, ton means metric ton. Production, exports, imports, and consumption of the Vietnamese iron and steel industry are cited from the South East Asia Iron and Steel Institute (various years) unless otherwise noted.

  6. 6.

    There are two major types of production systems in the iron and steel industry. The first is an integrated system in which iron, crude steel, and steel products are produced through a continuous process in the same production complex. The major material is iron ore, which is reduced into pig iron in the BF using coke. Next, carbon contents and other elements are adjusted in the basic oxygen furnace. Melted steel is poured into a continuous casting machine and cast into semi-products. Third, the semi-products are hot rolled into variously shaped steel products. Some hot rolled coils are rerolled under regular temperatures. Moreover, some hot or cold rolled coils are surface-treated, such as through galvanizing and painting. An integrated system is suitable for large-scale production. The second is the semi-integrated system in which only crude steel and steel products are produced in the same complex. The major material is steel scrap, which is melted, refined in the electric arc furnace (EAF), and cast in the continuous casting machine. The rolling process is the same as in the integrated system. The semi-integrated system is relatively suitable for medium and small-scale production.

  7. 7.

    World Bank Open Data.

  8. 8.

    Doi Moi means “reform” in Vietnamese. The Doi Moi policy is a series of market-oriented Vietnamese economic reforms since 1986.

  9. 9.

    Interview with a deputy general director of TISCO, August 5, 2014..

  10. 10.

    Interview with a general director of VTM, August 15, 2015.

  11. 11.

    “Ministry of Industry and Trade facing 12 loss-making projects,” dtinews, February 9, 2017 (http://dtinews.vn/en/news/018/49405/ministry-of-industry-and-trade-facing-12-loss-making-projects.html, retrieved on May 31, 2020).

  12. 12.

    “Cổ phần hóa VNSTEEL: Thép đã tôi thế …á?” (Equitization of VNSTEEL), AN NINH TIỀN TỆ (ANTT),

    May 8, 2017 (http://antt.vn/co-phan-hoa-vnsteel-thep-da-toi-the-a-8785.htm, retrieved on September 2, 2017).

  13. 13.

    “Vnsteel senryaku partner sagashi de nihon kigyo wo homon” (Vnsteel’s Executive visited Japan to find strategic partners), Viet-jo.com, November 4, 2011 (https://www.viet-jo.com/news/economy/110929052607.html, retrieved on May 31, 2020).

  14. 14.

    “406 SOEs under divestment: exciting opportunities for investors,” Vietnam Investment Review, August 26,

    2017 (http://www.vir.com.vn/406-soes-under-divestment-exciting-opportunities-for-investors.html, retrieved on January 14, 2019); “Vietnam to divest in 406 state owned enterprises by 2020,” Vietnam Briefing, August 30, 2017

    (http://www.vietnam-briefing.com/news/vietnam-sell-stakes-137-state-owned-enterprises-2020.html/, retrieved on January 14, 2019).

  15. 15.

    The specifics of Hoa Phat Complex were provided to the author through a company presentation in a meeting with the Hoa Phat Group, August 17, 2018.

  16. 16.

    Interview with the executive of HPG, August 8, 2014.

  17. 17.

    HPG website (http://www.hoaphat.com.vn/en/hoa-phat-steel-sheet-company-limited/, retrieved on October 27, 2018).

  18. 18.

    Specifics of the Hoa Phat Dung Quat Complex were provided to the author through a company presentation in a meeting with Hoa Phat Group, August 17, 2018.

  19. 19.

    The following two paragraphs are based on records of interviews with Vina Kyoei Steel from 2000 to 2018.

  20. 20.

    FHS website (http://www.fhs.com.tw/Intro/cover03.html, retrieved on March 1, 2016).

  21. 21.

    Ibid. FHS promotion video that the author watched in August 2018.

  22. 22.

    This paragraph is based on some news reports, including “Vietnam suffers 50 major toxic waste scandals in Vietnam in 2016,” VnExpress, December 30, 2016 (https://e.vnexpress.net/news/news/vietnam-suffers-50-major-toxic-waste-scandals-in-2016-3521238.html, retrieved on September 26, 2018); “Vietnam blames Formosa mill for fish kill,” Taipei Times, July 1, 2016 (http://www.taipeitimes.com/News/front/archives/2016/07/01/2003650089, retrieved on September 26, 2018).

  23. 23.

    “Rare rallies in Vietnam over mysterious mass fish deaths,” Reuters, May 1, 2016 (https://www.reuters.com/article/us-vietnam-formosa-plastics-environment-idUSKCN0XS0U6, retrieved on September 26, 2018).

References

  • Abe, M. (2016). The catch-up process in the Korean steel industry. In Y. Sato & H. Sato (Eds.), Varieties and Alternatives of Catching-up: Asian Development in the Context of the 21st century (pp. 125–151). Chiba: Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO).

    Google Scholar 

  • Christensen, C., et al. (2004). Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change. Boston: Harvard Business School Publishing.

    Google Scholar 

  • Christensen, C., & Bever, D. (2014). The Capitalist’s Dilemma. Harvard Business Review, 92(6), 60–68.

    Google Scholar 

  • D’Costa, Anthony P. (1994). State, steel and strength: Structural competitiveness and development in South Korea. Journal of Development Studies, 31(1), 44–81.

    Article  Google Scholar 

  • D’Costa, Anthony P. (1999). The Global Restructuring of the Steel Industry: Innovations, Institutions and Industrial Change. New York: Routledge.

    Book  Google Scholar 

  • Fujimoto, T. (2009). “Nikkan tekko sangyo” (Iron and steel industry in Japan and South Korea). In Takahiro Fujimoto & Kenichi Kuwashima (Eds.), Nihon Gata Purosesu Sangyo (Japanese Process Industries) (pp. 135–178). Tokyo: Yuhikaku Publishing (Japanese).

    Google Scholar 

  • Hart, S., & Christensen, C. (2002). The great leap: Driving innovation from the base of pyramid. MIT Sloan Management Review, 44(1), 51–56.

    Google Scholar 

  • Hiệp hội Thép Việt Nam (Vietnam Steel Association [VSA]) (2017). Ban Tin (News), July.

    Google Scholar 

  • Hoa Phat Group (HPG). (2017). Annual Report, Hoa Phat Group.

    Google Scholar 

  • Hoa Sen Group (HSG). (2016–2017). Annual Report, Hoa Phat Group.

    Google Scholar 

  • Imaoka, H., & Ohno, K. (1999). “Gurobaraizeshon ka deno boeki sangyo seisaku” (Trade and industry policy under the globalization). In S. Ishikawa & Y. Hara (Eds.), Vietnam no Shijo Keizaika (Transition to a Market-Oriented Economy in Vietnam) (pp. 211–224). Tokyo: Toyo Keizai Inc (Japanese).

    Google Scholar 

  • Japanese Members of Trade and Industry Group (Ohno, Kenichi, Kimura Fukunari and Kawabata, Nozomu). (2001). Summary of the Japanese views on steel industry and trade policy. In Ministry of Planning an Investment, The Socialist Republic of Viet Nam and Japan International Cooperation Agency (MPI-JICA) (Eds.), Study on the Economic Development Policy in the Transition Toward a Market-Oriented Economy in the Socialist Republic of Viet Nam (Phase 3): Final report; Vol. 2. -Trade and Industry (pp. 117–122). Tokyo: JICA.

    Google Scholar 

  • Juhn, S. (1991). Challenge of a latecomer: The case of the Korean steel industry with specific reference to POSCO. In E. Abe & Y. Suzuki (Eds.), Changing Patterns of International Rivalry: Some Lessons from the Steel Industry (pp. 269–293). Tokyo: University of Tokyo Press.

    Google Scholar 

  • Kawabata, N. (2001). The current Vietnamese steel industry and its challenges. In Ministry of Planning an Investment, The Socialist Republic of Viet Nam and Japan International Cooperation Agency (MPI-JICA) (Eds.), Study on the Economic Development Policy in the Transition Toward a Market-Oriented Economy in the Socialist Republic of Viet Nam (Phase 3): Final report; Vol. 2. -Trade and industry (pp. 139–193). Tokyo: JICA.

    Google Scholar 

  • Kawabata, N. (2005). Higashi ajia tekkogyo no kozo to dainamizumu (Structure and dynamism of the iron and steel industry in East Asia), Kyoto: Minerva Publishing (Japanese).

    Google Scholar 

  • Kawabata, N. (2007). Iron and Steel Industry in Viet Nam: A New Phase and Policy Shift, VDF Discussion Paper, 9, Vietnam Development Forum, August.

    Google Scholar 

  • Kawabata, N. (2016a). The Vietnamese iron and steel industry in transition to a market economy—Attainments and challenges—, TERG Discussion Paper, No. 349, Graduate School of Economics and Management, Tohoku University, 1–45.

    Google Scholar 

  • Kawabata, N. (2016b). Betonamu tekkogyo ni okeru minkan kigyo no bokko (Emergence of private companies in the Vietnamese iron and steel industry). Journal of Asian Management Studies, 22, 79–92 (Japanese).

    Google Scholar 

  • Kawabata, N. (2017). “Betonamu kokuyu tekko kigyo no suitai to risutorakucharingu (Decline and Restructuring of a State-owned Enterprise Group in the Vietnamese Iron and Steel Industry)”, RIETI Discussion Paper Series, 17-J-066, Research Institute of Economy, Trade and Industry, 1–41, October (Japanese).

    Google Scholar 

  • Kimura, F. (2004). New development strategies under globalization: Foreign direct investment and international commercial policy in Southeast Asia. In A Kohsaka (Ed.), New development strategies: Beyond the Washington consensus (pp. 115–133). London: Palgrave Macmillan.

    Chapter  Google Scholar 

  • Marukawa, T. (2016). ‘Catch-down’ innovation in developing countries. In Y. Sato & H. Sato (Eds.), Varieties and Alternatives of Catching-up: Asian Development in the Context of the 21st Century (pp. 183–210). London: Palgrave Macmillan.

    Chapter  Google Scholar 

  • Mitsubishi Research Institute. (1981). 1980 nendai ni okeru nikkan kokusai bungyo no doko ni kansuru kesu sutadi (Case Studies of The International Division of Labor Between Japan and South Korea in the 1980s), NRF-79–3, National Institute for Research Advancement (Japanese).

    Google Scholar 

  • Nagura, B. (2015). “Tekko” (Iron and steel). In Business History Society of Japan (Ed.), Keieishigaku no 50 nen (50 years of business history) (pp. 213–224). Tokyo: Nihon Keizai Hyouronsha, Ltd (Japanese).

    Google Scholar 

  • Ohno, K. (2003). “Kokusai keizai togo ni idomu Betonamu” (Viet Nam is coming up against international integration). In K. Ohno & N. Kawabata (Eds.), Betonamu no kogyoka senryaku (Industrialization strategy of Viet Nam) (pp. 33–66). Tokyo: Nippon Hyoron Sha Company (Japanese).

    Google Scholar 

  • Park, W. (1989). Kankoku no gijutsu hatten (Technology Development in South Korea), Tokyo: Bunshindo Shoten Co (Japanese).

    Google Scholar 

  • Sato, Y. (1999). “Taiwan no sangyo seisaku ni tsuite” (Industry Policies in Taiwan). In Y. Sato (Ed.), Kokka to Keizai Seicho (State and Economic Growth) (pp. 17–31). IDE (Japanese).

    Google Scholar 

  • Sato, Y. (2008). “Taiwan tekkogyo no seicho oyobi kodoka no mekanizumu: Jidosha sangyo ni izon shinai hatten no purosesu to kanosei” (Mechanism of the growth and upgrading of the Taiwanese steel industry: Could it develop without strong support from the automobile industry? In H. Sato (Ed.), Ajia shokoku no tekkogyo: Hatten to henyo (The Steel Industry in Asia: Development and Restructuring) (pp. 83–111). Chiba: IDE-JETRO (Japanese).

    Google Scholar 

  • South East Asia Iron and Steel Institute (SEAISI) (various years). Steel Statistical Yearbook, South East Asia Iron and Steel Institute.

    Google Scholar 

  • Syu, A. (1995). From economic miracle to privatization success: Initial stages of the privatization process in two SOEs on Taiwan. Lanham: University Press of America.

    Google Scholar 

  • Toda, H. (Ed.) (1987). Tekkogyo (steel industry), Tokyo: Nikkei Inc. (Japanese).

    Google Scholar 

  • Vu-Thanh, T. A. (2017). Does WTO accession help domestic reform? The Political Economy of SOE Reform Backsliding in Vietnam, World Trade Review, 16(1), 85–109.

    Google Scholar 

  • World Steel Association. (2018). World Steel in Figures 2018, World Steel Association.

    Google Scholar 

Governmental Documents of Vietnam

  • Thủ Tướng Chính Phủ, Số: 134/2001/QĐ-TTg, Phê duyệt Quy hoạch tổng thể phát triển ngành thép đến năm 2010, ngày 10 tháng 9 năm. (2001). (The Prime Minster of the government, Decision No. 134/2001/QĐ-TTg, Approving the overall planning on the development of the steel industry till 2010, September 10, 2001).

    Google Scholar 

  • Thủ Tướng Chính Phủ, Số: 145/2007/QĐ-TTg, Quyết định về Phê duyệt quy hoạch phát triển ngành thép Việt Nam giai đoạn 2007–2015, có xét đến năm 2025, ngày 04 tháng 9 năm 2007 (The Prime Minster of the government, Decision No. 145/2007/QĐ-TTg, Approving the Vietnam steel development plan for 2007-2015 with a vision to 2025, September 4, 2007).

    Google Scholar 

Databases

  • World Bank Open Data. (https://data.worldbank.org/) (Retrieved on October 27, 2018).

  • World Tariff Database. (http://tariffdata.wto.org/). (Retrieved on September 26, 2018).

  • *This study was supported by Japan Society for the Promotion of Science (JSPS) Grant-in-aid for University-Industry Cooperative Research and JSPS KAKENHI Grant Numbers JP17H02226, JP20K01905. *I would like to thank Editage (www.editage.jp) for English language editing.

Download references

Author information

Authors and Affiliations

  1. Tohoku University, Sendai, Japan

    Nozomu Kawabata

Authors
  1. Nozomu Kawabata
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Nozomu Kawabata .

Editor information

Editors and Affiliations

  1. Kyoto University, Kyoto, Japan

    Hiromi Shioji

  2. School of Management, Tribhuvan University, Kathmandu, Nepal

    Dev Raj Adhikari

  3. Faculty of International Studies, Takushoku University, Hachioujishi, Tokyo, Japan

    Fumio Yoshino

  4. Rikkyo University, Tokyo, Japan

    Takabumi Hayashi

Rights and permissions

Reprints and permissions

Copyright information

© 2021 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Kawabata, N. (2021). Development of the Vietnamese Iron and Steel Industry Under International Economic Integration. In: Shioji, H., Adhikari, D.R., Yoshino, F., Hayashi, T. (eds) Management for Sustainable and Inclusive Development in a Transforming Asia. Springer, Singapore. https://doi.org/10.1007/978-981-15-8195-3_15

Download citation

Publish with us

Policies and ethics

Search

Navigation