Vietnam Steel Trader SMC Aims 800,000 Tonnes Sales in 2015

SMC, one of the largest traders of steel products for building materials in Vietnam, plans to increase annual sales volume to 800,000 tonnes for 2011-2015. Mr. Nguyen Ngoc Anh, chairman of SMC, said Vietnamese economy is in difficult phase when inflation continues and interest rate rises. Vietnamese companies are facing severe management and steel demand is weak, said Mr. Anh at an interview with Japan Metal Bulletin in Vietnam. Mr. Anh said steel demand was forecasted to increase by 7-8% in 2011 from 2010 but the actual growth is estimated at 3-4%. He analyzed Vietnamese steel price would decrease when international steel market price declines.

Mr. Anh explained SMC has successfully expanded its business and the sales volume is expected to increase by 12% to 560,000 tonnes in 2011 from 2010. The sales value is estimated to increase by 18% to approximately 27 billion yen. SMC could raise the sales ratio for manufacturing industry to 20-30% since a new coil center started operation this year. Mr. Anh suggested Vietnam largest steel trader is Tahen including trade of billet and ferrous scrap while SMC is regarded as the largest trader of steel products for building materials.

Mr. Anh explained SMC is cautious on finance control. The company has maintained good partnership with banks that enables lower interest rate than other companies’. He analyzed SMC could increase the revenue in 2011 thanks to the sales volume growth, the selling price upsurge and new coil center’s start. No.1 coil center’s capacity is 30,000 tonnes per year and no.2 coil center’s capacity is 50,000 tonnes, he added.

SMC’s current sales composition is 78% for steel wire rod and rebar while 22% for steel sheet. He said the company currently has no plan to start trade of billet and ferrous scrap in order to maintain favorable partnership with domestic steel makers.

Mr. Anh overviewed steel inventory in Vietnamese market is recently estimated at 800,000 tonnes against the usual level of 1 million tonnes. He analyzed domestic dealers are decreasing purchase volume due to high interest rate and exchanging inventories to cash.

Mr. Anh said SMC plans to increase the sales volume to 800,000 tonnes per year for 2011-2015 and raise the sales ratio for manufacturing industry to 30%. He also gave a vision to start export business at 10% of the sales volume. SMC would newly establish 4-5 coil centers and increase the employee number to 500 from present 400.

He revealed SMC is seeking business collaboration with Japanese steel maker and large steel dealer. The company aims to conclude the alliances within this year. Mr. Anh said SMC is willing to receive supports for management systems from Japanese partners.