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Photos: Abandoned $145mn steel plant in northern Vietnam

Thursday, June 01, 2017, 13:26 GMT+7
Photos: Abandoned $145mn steel plant in northern Vietnam
An overview of the Cai Lan steel mill in Hai Phong City, located in northern Vietnam

The ‘legacy’ of the infamous, and now defunct, state-run Vinashin not only includes a loss-making shipbuilder and its debt-ridden subsidiaries, but also a deserted multimillion-dollar steel in northern Vietnam.

In 2011, state-owned shipbuilding firm Vinashin officially collapsed. The company was ‘revitalized’ two years later under the new name ofShipbuilding Industry Corporation (SBIC).

The people behind the restructuring were upbeat, announcing that it would only take SBIC five years to fully recover, an outlook that proved overly optimistic.

The Dung Quat Shipyard, a Vinashin subsidiary the company was forced to transfer to other state-run companies before its collapse, is on the verge of bankruptcy in spite of a hefty US$225 million financial injection meant to boost its performance.

A number of the now SBIC-run shipbuilders are operating mere fractions their actual capacity, and the parent company reported more than VND5.4 trillion ($237.89 million) in losses for 2016.

Sharing the fate of these facilities is the Hai Phong-based Cai Lan steel mill, a VND3.3 trillion ($145.37 million) facility which broke ground in 2003 under the misguided hope of supplying hot rolled steel sheets for Vinashin’s shipbuilding operations.

In 2010, the plant entered a test run, eventually producing 5,000 metric tons of steel sheeting that met international standards. While the company was able to export 3,000 tons of its first batch to the U.S., the remainder is still gathering dust at the mill.

Along with nearly 2,000 tons of surplus steel sheeting sits $50 million worth of equipment and machinery.

2-1496218758.jpgNot a single worker is spotted in the main production area, spanning dozens of thousands of square meters.

The mill is operated by SBIC-owned CAILANSHINCO, which has been tasked with finding a solution to ‘save’ the costly project.

CAILANSHINCO has proposed transferring the plant, dissolving the plant, or declaring bankruptcy, all of which are infeasible as no investor would find interest in a deteriorating steel mill whose developer is besieged by huge debts, according to a company source.

Privatization is also a solution, but again “it is not easy to find a private investor with healthy financial muscles and a fondness for the hot rolled steel sheet sector,” the source said.

Below are the latest photos of the Cai Lan steel mill taken by Tuoi Tre (Youth) newspaper.

3-1496218758.jpgHuge machines gather dust at the plant.

5-1496218758.jpgHuge machines gather dust at the plant.

6-1496218758.jpgMachines collect rust at the plant.

7-1496218758.jpgThe costliest piece of machinery at the plant, worth more than $2 million, now lies dormant.

8-1496218759.jpgA rusted steel ingot sits at the plant.

9-1496218759.jpgOne of the steel sheets produced in the trial-run in 2010 is seen at the plant.

10-1496218759.jpgDust and rust are omnipresent at the plant.

11-1496218759.jpgDust and rust are omnipresent at the plant.

12-1496218759.jpgRusted machines are left abandoned at the plant, some of which have been destroyed by seawater.

13-1496218759.jpgRusted machines are left abandoned at the plant, some of which have been destroyed by seawater.

14-1496218759.jpgComputers and furniture remain inside an operating room, whose doors are however locked and sealed.

15-1496218759.jpgNguyen Van Nam, one of the 41 guards hired to protect the plant

16-1496218759.jpgA half-built manufacturing plant

17-1496218760.jpgThis section of the Cai Lan plant is leased to a cement maker, which provides the company with money to maintain operations.

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