Steel Manufacturing Giants Strengthens its Footprints with New Wholly Owned Subsidiary in Hai Phong

Vietnam’s steel sector continues to evolve as major domestic players adapt to shifting market demand, infrastructure investment, and competitive pressures. A notable development in late 2025 was the announcement by Hoa Sen Group, one of Vietnam’s leading steel producers, that it will establish a wholly owned subsidiary in Hai Phong. This strategic move reinforces the company’s commitment to expanding its production base and enhancing operational efficiency in Vietnam’s dynamic steel landscape.

Strategic Expansion in Hai Phong

On December 26, 2025, Hoa Sen Group received board approval to establish Hoa Sen Hai Phong One Member Limited Liabilities Company (HSHP), a subsidiary with a charter capital of VND 300 billion (about USD 11.4 million). The new entity will be fully owned by Hoa Sen Group and will focus on steel production and related operations in the industrial hub of Hai Phong, located in northern Vietnam.

Hai Phong’s strategic location as a logistics and manufacturing gateway — with port infrastructure linked to domestic and international markets — provides an advantageous base for Hoa Sen’s production growth. By situating operations here, the company can benefit from efficient access to raw materials, export channels, and the expanding industrial ecosystem in northern Vietnam.

Why Heading North?

Hoa Sen Group is a dominant player in Vietnam’s steel industry, known for its sizeable domestic market share in galvanized and coated steel products and extensive distribution network. Recent data show the company operates multiple manufacturing facilities across the country and has more than 500 retail outlets, serving both domestic and export demand.

The formation of a dedicated subsidiary like HSHP reflects a strategic shift toward specialized regional operations, enabling more targeted investment and responsiveness to local market conditions. This structure also allows for greater operational autonomy and clearer financial reporting for the Hai Phong unit.

Moreover, this expansion comes amid broader moves by Hoa Sen to diversify beyond traditional steel manufacturing. The group already established Hoa Sen Home JSC in early 2026, focusing on retailing building materials, interior products, and home solutions — a move that taps deeper into Vietnam’s construction and housing market.

Balancing Production with Retail Strategy

The creation of HSHP complements Hoa Sen’s ongoing strategy of balancing industrial production with upstream and downstream market opportunities. While the new subsidiary focuses on enhancing manufacturing capabilities, Hoa Sen Home is positioned to grow the group’s reach into building materials retail, bridging production with end-customer demand.

This dual approach reflects the changing dynamics of Vietnam’s steel industry, where domestic consumption patterns, property development trends, and infrastructure projects are driving demand for steel products and related materials. Expanding both production and distribution arms allows Hoa Sen to capture value across the entire supply chain.

Navigating Market Challenges

Vietnam’s steel industry has seen fluctuating demand and competitive pressures in recent years. While key producers like Hoa Sen hold strong market positions, challenges such as excess capacity in the sector and volatility in export markets persist. Insights from industry analyses highlight that steelmakers must balance capacity utilization and profitability while responding to import dynamics and domestic consumption trends.

By strengthening its regional capabilities through HSHP, Hoa Sen positions itself to better navigate these industry headwinds. The Hai Phong subsidiary can help the group fine-tune production to meet regional demand with lower logistical costs and improved supply chain efficiency.

Industry Outlook

The expansion also aligns with broader trends in Vietnam’s industrial landscape. Major infrastructure initiatives — including transport and energy projects — are expected to sustain steel demand in the coming years. Moreover, as global supply chains recalibrate, domestic steel producers may find increased opportunities to serve both local construction markets and export corridors.

In comparison, other Vietnamese steel leaders are similarly capitalizing on growth opportunities. For example, Hoa Phat Group has pursued significant investments in specialized steel production and infrastructure steel facilities to support national projects like rail networks and industrial development.

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