Hoa Sen Group joins with seven strategic partners
By Quoc Hung - The Saigon Times Daily
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| Le Phuoc Vu (L), general director and chairman of Hoa Sen Group, and Kevin Lim, CEO of STIC Investment, show the signed documents of the investment contract yesterday - Photo: Minh Tam |
HCMC - Binh Duong-based steelmaker Hoa Sen Group on Thursday signed deals on cooperation in a swath of fields with seven international and domestic strategic partners.
The group’s new partners are active in fields such as credit supply, capital contribution, training, human resources, supply, science and techno research and application.
South Korea’s STIC Investment Inc., FPT Securities Joint Stock Co. and Bong Sen Fund Managing Joint Stock Company acquired a combined 11.96 million of Hoa Sen’s shares worth VND538 billion.
Le Phuoc Vu, general director and chairman of Hoa Sen Group, said at the signing ceremony in HCMC that the organizations were financially sound and had committed to the group for now.
He said STIC Investment Inc. managed properties worth US$1.7 billion in South Korea. After studying the Vietnamese stock market for nearly two years, they decided to invest in Hoa Sen Group.
Vu said the group would use the funds to continue its Hoa Sen-Phu My corrugated steel plan project in the southern province of Ba Ria in Vung Tau.
The project, worth VND2,231 billion, will include South East Asia’s first Non-Oxidization Furnace (NFO) technology steel-plating assembly line, with a 450,000 ton annual capacity as well as a color-plating assembly line which will produce 180,000 tons per year. The group will also build five steel coolant laminating assembly lines with a one million ton annual capacity.
Vu said this project would improve manufacturing competency and provide dense zinc steel products. He added that currently Vietnam imports 15% of this product.
The group’s deals with Vietcombank’s Binh Duong Industrial Park and Vung Tau branches on Thursday secure total funding of VND450 billion. Eximbank will provide investment capital for another two steel coolant laminating projects of Hoa Sen, with an expected 400,000 ton annual capacity. Vietcombank’s Binh Duong Industrial Park branch supplied most of the capital.
According to the contract, the loan duration is 72 months and the grace period for capital will be 15 months after the first payment.
The group also signed a strategic cooperation agreement with the National University of HCMC.
Through the agreement, the university will supply Hoa Sen Group with a high quality human resource base to improve the company’s professional capability. The university will also develop new technology to apply to the group’s manufacturing process.
In return, Hoa Sen Group will provide scholarships to bright, handicapped students. They will also offer support to both students and lecturers who are conducting scientific research assignments.
Vu said the partnerships would help Hoa Sen Group to achieve their US$1 billion sales target with US$100 million in profits, within the next 5-7 years.
The group’s sales reached VND2,831 billion with a VND189 billion net profit in the 2008-2009 fiscal year. This fiscal year, they aim to reach VND5,000 billion in sales and VND520 billion in net profits – a 76% and 175% increase respectively compared with last year.
In the past four months, the group has made VND1,428 billion in sales and VND185 billion in net profits, 29% and 36% of its target respectively.